The firm is leading a campaign by dissident investors that want to replace Gildan’s current board in a bid to bring back former chief executive Glenn Chamandy
Browning West, a California-based investment firm with a roughly 5-per-cent stake in Gildan, says the apparel company’s move to initiate a sale process is an attempt by current directors to dodge their day of reckoning at an annual meeting scheduled for May 28. The firm is leading a campaign by dissident investors who want to replace Gildan’s current board and bring back former chief executive Glenn Chamandy.
The spectre of a sale has raised the stakes in what has so far been a clash over leadership and casts it in a new light. Browning West and several other shareholders in Gildan are thinking about the company’s value over several years and are unlikely to support an offer that doesn’t come with a sizable premium. For its part, the board faces pressure to do what’s in the company’s best long-term interests, rather than accepting a bid to deflect investor anger over its decision to dismiss Mr.
Gildan shareholders may be frustrated by this turn of events and may not support a takeover scenario at this point, Mr. Landry wrote in a note to clients. “Some may argue that this quick profit undermines the long-term value of the company and that in the medium-term, upon strong execution, the share price could surpass the near-term takeover price.”
Gildan’s board insists it was entirely justified in sacking Mr. Chamandy, saying it had gradually lost faith in his ability to lead the company. Investors, however, were taken aback by the C-suite switch. Several of them have said the board failed in its duties because it abruptly terminated a proven CEO and installed a replacement who is not qualified for the job.
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