The Sports Authority’s plan to go private has sparked a shareholder lawsuit alleging that the proposed buyout price shortchanges investors.
Amand Partners sued the Englewood-based sporting-goods retailer Monday in Delaware Chancery Court in Wilmington. The suit alleges that the proposed buyout by private-equity firm Leonard Green & Partners LP and members of the company’s management is inadequate because the company did not test the market to determine the company’s value. The suit seeks class-action status.
Terms of the buyout, announced Monday, call for shareholders to receive $37.25 per share of the company. The entire deal, including debt, is valued at $1.3 billion.
The Sports Authority owns 398 stores in 45 states, including 25 Gart Sports stores in Colorado.
Sports Authority shares were flat at $36.70 on Tuesday on the New York Stock Exchange. The company’s stock jumped 18 percent following news of the deal Monday and have gained 49 percent in the last year.
Sports Authority management “failed to make an informed decision to date as the public record does not indicate that a market check of (Sports Authority’s) value was obtained,” according to the lawsuit.
A Sports Authority spokesman did not return messages.
Analysts said Monday it was unlikely that another bidder would emerge.
Staff writer Kristi Arellano can be reached at 303-820-1902 or karellano@denverpost.com.
