Gildan Activewear Inc. (GIL: TSX and NYSE) (“Gildan” or the
“Company”) today announced that it has learned that Browning West,
LP (“Browning West”) accumulated shares in violation of the United
States Hart-Scott-Rodino Antitrust Improvements Act of 1976 (the
“HSR Act”) as part of its misguided campaign to reinstall Glenn
Chamandy as CEO of Gildan.
The HSR Act is a US antitrust statute that
requires investors to notify the US Federal Trade Commission and US
Department of Justice and comply with a 30-day waiting period
before acquiring voting securities in excess of a certain ownership
threshold. By acquiring shares in excess of the threshold without
notifying these agencies and the Company, and without waiting 30
days to acquire the shares after providing notice, Browning West
violated US law.
Browning West’s rapid and illegal share
acquisitions were undertaken as a necessary part of its scheme to
take control of the Company and its Board and reinstall Mr.
Chamandy. Under the Canada Business Corporations Act, shareholders
are entitled to requisition a special meeting of shareholders only
if they hold over 5% of a company’s shares. Browning West’s illegal
share acquisitions barely put it over this threshold, and on
January 9, 2024, Browning West sought to requisition a special
meeting to take control of the Company and its Board by removing
eight sitting directors and appointing eight new directors
hand-picked by Browning West, including one of its co-founders and
Mr. Chamandy.
Without the shares acquired in violation of the
HSR Act, Browning West would have no legal rights to requisition a
meeting. The Board intends to explore all avenues to ensure that
shareholders are protected from Browning West’s illegal activity,
potentially including notifications to applicable regulators and
legal proceedings in the United States and Canada.
Gildan discovered Browning West’s violation of
the HSR Act after it filed a Schedule 13D with the US Securities
and Exchange Commission on January 8, 2024.
On Friday, January 19, 2024, Browning West
informed the Company that it would be belatedly making its filing
under the HSR Act but asserted that it was doing so “under
protest”, in an ill-advised attempt to avoid responsibility for its
failure to comply with law. By suggesting that its filing was made
“under protest” Browning West simply compounds its errors and
demonstrates both an unwillingness to take responsibility for its
actions and the lack of competence to run a proxy fight let alone
Gildan’s business.
Browning West’s illegal share acquisitions add
to the many serious questions raised about the purpose, planning
and prudence of Browning West’s campaign. Less than one week after
Mr. Chamandy was removed by the Board, and after only a
15-minute meeting with the Chair of the Board, Browning West rushed
so recklessly into reinstalling Mr. Chamandy that it violated US
antitrust law. At this stage, questions remain about contacts
between Browning West and Mr. Chamandy before and after his
removal as CEO, contacts between Browning West and other investors,
and whether these contacts violate Canadian and US securities laws.
What is clear is that Browning West and Mr. Chamandy desire to
seize control of Gildan as rapidly as possible, and it appears they
will step over the law to do so.
The Board will continue to take all appropriate
actions to protect shareholder value, including ensuring that all
shareholders play by the same rules.
Caution Concerning Forward-Looking
Statements
Certain statements included in this press
release constitute “forward-looking statements” within the meaning
of the US Private Securities Litigation Reform Act of 1995 and
Canadian securities legislation and regulations and are subject to
important risks, uncertainties, and assumptions. This
forward-looking information includes, amongst others, information
with respect to our objectives and strategies. Forward-looking
statements generally can be identified by the use of conditional or
forward-looking terminology such as “may”, “will”, “expect”,
“intend”, “estimate”, “project”, “assume”, “anticipate”, “plan”,
“foresee”, “believe”, or “continue”, or the negatives of these
terms or variations of them or similar terminology. We refer you to
the Company’s filings with the Canadian securities regulatory
authorities and the US Securities and Exchange Commission, as well
as the risks described under the “Financial risk management”,
“Critical accounting estimates and judgments”, and “Risks and
uncertainties” sections of our most recent Management’s Discussion
and Analysis for a discussion of the various factors that may
affect these forward-looking statements. Material factors and
assumptions that were applied in drawing a conclusion or making a
forecast or projection are also set out throughout such
document.
Forward-looking information is inherently
uncertain and the results or events predicted in such
forward-looking information may differ materially from actual
results or events. Material factors, which could cause actual
results or events to differ materially from a conclusion or
projection in such forward-looking information, include, but are
not limited to changes in general economic and financial conditions
globally or in one or more of the markets we serve and our ability
to implement our growth strategies and plans. These factors may
cause the Company’s actual performance in future periods to differ
materially from any estimates or projections of future performance
expressed or implied by the forward-looking statements included in
this press release.
There can be no assurance that the expectations
represented by our forward-looking statements will prove to be
correct. The purpose of the forward-looking statements is to
provide the reader with a description of management’s expectations
regarding the Company’s future financial performance and may not be
appropriate for other purposes. Furthermore, unless otherwise
stated, the forward-looking statements contained in this press
release are made as of the date hereof, and we do not undertake any
obligation to update publicly or to revise any of the included
forward-looking statements, whether as a result of new information,
future events, or otherwise unless required by applicable
legislation or regulation. The forward-looking statements contained
in this press release are expressly qualified by this cautionary
statement.
About Gildan
Gildan is a leading manufacturer of everyday
basic apparel. The Company’s product offering includes activewear,
underwear and socks, sold to a broad range of customers, including
wholesale distributors, screenprinters or embellishers, as well as
to retailers that sell to consumers through their physical stores
and/or e-commerce platforms and to global lifestyle brand
companies. The Company markets its products in North America,
Europe, Asia Pacific, and Latin America, under a diversified
portfolio of Company-owned brands including Gildan®, American
Apparel®, Comfort Colors®, GOLDTOE®, Peds®, in addition to the
Under Armour® brand through a sock licensing agreement providing
exclusive distribution rights in the United States and Canada.
Gildan owns and operates vertically integrated,
large-scale manufacturing facilities which are primarily located in
Central America, the Caribbean, North America, and Bangladesh.
Gildan operates with a strong commitment to industry-leading
labour, environmental and governance practices throughout its
supply chain in accordance with its comprehensive ESG program
embedded in the Company’s long-term business strategy. More
information about the Company and its ESG practices and initiatives
can be found at www.gildancorp.com.
Investor inquiries:
Jessy Hayem, CFA
Vice-President, Head of Investor Relations
(514) 744-8511
jhayem@gildan.com
Media inquiries:
Geneviève Gosselin
Director, Global Communications and Corporate Marketing
(514) 343-8814
ggosselin@gildan.com
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