Gildan Activewear Inc . (NYSE:GIL) announced on Tuesday its board is putting the company for sale following a review by a special committee that was established after a confidential acquisition bid.
"The Special Committee determined that it was consistent with its fiduciary duties and in the best interests of Gildan to contact other potential bidders with a view to maximizing the value of any potential transaction," said Simon Beauchemin, Gildan's spokesperson.
This decision came after Gildan received a takeover offer, prompting the enlistment of RBC Capital Markets and Goldman Sachs Group to identify additional interested parties. According to reports by the Globe and Mail, the move was influenced by initial interest from a potential acquirer in the past month.
The company, renowned for its clothing manufacturing operations, is actively seeking potential buyers with the guidance of its financial advisors, said Beauchemin.
While interest from several reputable entities has been confirmed, there is no guarantee that these discussions will result in a sale.
Trading in GIL shares on both the New York and Toronto stock exchanges was temporarily suspended, with its U.S. stock seeing a 10% surge just before the halt.
The apparel maker had a market capitalization of C$7.72 billion ($5.69 billion) at the last close.
The backdrop to this development includes recent tensions between Gildan’s management and key investors, notably the investment firm Browning West.
These disagreements led to the dismissal of co-founder and CEO Glenn Chamandy in December.
In an effort to address these internal conflicts, Gildan scheduled an annual and special shareholder meeting for May 28, aiming to overhaul its board and potentially reinstate Chamandy as CEO.