Key Takeaways
- Trading in shares of Gildan Activewear was paused Tuesday after the stock jumped following reports the board of directors was considering selling the company.
- The Montreal-based apparel maker’s board is in the middle of a heated battle with institutional investors led by Browning West LP.
- Investors are seeking to reconstitute the company’s board and reinstate co-founder Glenn Chamandy as CEO. Chamandy was abruptly ousted last December.
Trading in shares of Gildan Activewear (GIL) was paused on Tuesday after the stock jumped following reports the board was exploring selling the company.
According to the Globe and Mail, Gildan received a takeover offer from a potential buyer, which prompted the board to have advisors Goldman Sachs and RBC Capital Markets gauge interest among other potential buyers.
Gildan shares jumped more than 10% Tuesday afternoon before trading was paused.
A Gildan spokesperson told Bloomberg that the company had set up a special board committee to consider a sale after several buyout candidates “expressed an interest in considering a potential friendly transaction.”
The move comes amid a battle for control of the company between the current board and a group of institutional investors led by Browning West LP. Gildan’s board ousted co-founder and CEO Glenn Chamandy in December, replacing him with former Fruit of the Loom executive Vince Tyra.
Browning West is currently seeking to have five nominees elected to Gildan’s board and have Chamandy reinstated as CEO. It has accused the company’s current directors of intentionally delaying a special meeting the firm requested to vote on those nominees, demonstrating “a complete disregard for sound corporate governance and a total lack of respect for the will of the shareholders.”
Gildan has said the shareholder meeting date was set for May 28, 2024, rather than in March as Browning West requested, to “provide shareholders with an opportunity to assess CEO Vince Tyra’s leadership of the Company so they can make the most informed decision about whom they assess is the best executive to lead Gildan,” among other reasons.