LOS ANGELES--(BUSINESS WIRE)--Browning West, LP (together with its affiliates, “Browning West” or “we”), which is a long-term shareholder of Gildan Activewear Inc. (NYSE: GIL) (TSX: GIL) (“Gildan” or the “Company”) and beneficially owns approximately 5.0% of the Company’s outstanding shares, today issued the below statement regarding Gildan’s confirmation that it has initiated a sale process.
“Since the onset of our campaign, we have maintained that Gildan is a high-quality business with significant latent earnings power and strong value creation potential under the right Board and management. We are naturally concerned that the Board has initiated a sale process in order to avoid accountability following continuous and growing support for Browning West’s calls for significant Board reconstitution. Based on unsolicited feedback we have received from fellow shareholders, we believe that the Company’s owners would be dismayed at the rumored $42 USD per share indication from a potential buyer, which effectively represents no premium. To put this low price in context, if Glenn Chamandy had not been terminated and the stock had simply performed in line with the most relevant index, it would be worth approximately $42 USD per share today. We believe that the stock will recover to at least this level after our experienced and credible slate is elected in May, and it could, in our view, be worth multiples of that level over the long term.
The Board’s reactionary sale process underscores our message to shareholders last week that a meaningful reconstitution of the Board is immediately required, even before the Annual Meeting in May. Our slate clearly has substantial shareholder backing and is focused on maximizing long-term shareholder value, compared to the current ‘lame duck’ Board which is poorly positioned to evaluate any offers for the Company because: (i) it has already revealed its lack of competence due to its botched CEO succession process, (ii) its standalone plan under weak leadership is likely substantially inferior to any plan executed by our highly qualified slate, and (iii) the Board is entirely focused on avoiding personal accountability at the May 28th meeting rather than strong shareholder outcomes. Under no circumstances can the current Board be trusted to oversee a sale process.”
Disclaimer for Forward-Looking Information
Certain information in this news release may constitute “forward-looking information” within the meaning of applicable securities legislation. Forward-looking statements and information generally can be identified by the use of forward-looking terminology such as “outlook,” “objective,” “may,” “will,” “expect,” “intend,” “estimate,” “anticipate,” “believe,” “should,” “plans,” “continue,” or similar expressions suggesting future outcomes or events. Forward-looking information in this news release may include, but is not limited to, statements of Browning West regarding (i) how Browning West intends to exercise its legal rights as a shareholder of the Company, and (ii) its plans to make changes at the Board and management of the Company.
Although Browning West believes that the expectations reflected in any such forward-looking information are reasonable, there can be no assurance that such expectations will prove to be correct. Such forward-looking statements are subject to risks and uncertainties that may cause actual results, performance or developments to differ materially from those contained in the statements including, without limitation, the risks that (i) the Company may use tactics to thwart the rights of Browning West as a shareholder and (ii) the actions being proposed and the changes being demanded by Browning West, may not take place for any reason whatsoever. Except as required by law, Browning West does not intend to update these forward-looking statements.
Advisors
Olshan Frome Wolosky LLP is serving as legal counsel, Goodmans LLP is serving as Canadian legal counsel, and IMK is serving as Quebec legal counsel. Longacre Square Partners is serving as strategic advisor and Pelican PR is serving as public relations advisor. Carson Proxy is serving as proxy advisor.
About Browning West, LP
Browning West is an independent investment partnership based in Los Angeles, California. The partnership employs a concentrated, long-term, and fundamental approach to investing and focuses primarily on investments in North America and Western Europe.
Browning West seeks to identify and invest in a limited number of high-quality businesses and to hold these investments for multiple years. Backed by a select group of leading foundations, family offices, and university endowments, Browning West’s unique capital base allows it to focus on long-term value creation at its portfolio companies.