NEW YORK – The spurned suitor isn’t giving up.
In a regulatory filing with the Securities and Exchange Commission, Hidary Group disclosed that it brought suit against Everlast Worldwide in a Delaware court Tuesday seeking to force the boxing brand to honor its merger agreement with the investment group and accusing Everlast of failing to negotiate in good faith.
The move, the latest in what has become a continuing drama between the brand and investors that include one of its licensees, had been expected since Hidary said earlier this month that it might take legal action.
Everlast agreed to be acquired by Hidary on June 1 for $26.50 a share, or $146 million, only to have the agreement terminated 27 days later when the Brands Holdings subsidiary of Sports Direct International offered $30 a share, or $168 million.
Hidary came back with an offer of $31.25 a share, or $175 million, only to see Sports Direct prevail with a bid of $33.00 a share, or more than $182 million.
However, the suit, brought in the Court of Chancery in the state of Delaware, alleged that Hidary “willfully refused to negotiate in good faith” after receipt of the Sports Direct offer.
Hidary claimed in the suit that it responded to the $30 offer from Sports Direct with an amended offer of $30.55 a share and indicated willingness to discuss other amendments to its original offer. Both the financial offer and the invitation to hold further talks were ignored, Hidary said.
Hidary isn’t only Everlast’s licensee and rejected suitor, but also owns 36.1% of Everlast’s common stock.
Among other items, Hidary has asked the court to declare the original Hidary merger agreement to be valid and binding and the Sports Direct pact null and void. It seeks reimbursement of damages sustained as a result of Hidary’s alleged breach of contract.