Browning West Discloses Gildan Activewear’s Efforts to Deprive Shareholders of an Opportunity to Reconstitute the Board at a Validly Requisitioned Special Meeting
22 Janvier 2024 - 3:10AM
Business Wire
Issues Letter to Fellow Shareholders
Regarding the Board’s Desperate and Self-Serving Attempt to Avoid
Holding Browning West’s Requisitioned Special Meeting
Notes That the Board’s Most Recent Gambit
Coincides with Other Troubling Actions, Including the Initiation of
a Campaign to Intimidate and Silence Vocal Shareholders
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 an open letter to fellow shareholders in
response to the Board of Directors’ (the “Board”) attempt to
invalidate Browning West’s valid requisition for a Special Meeting
of Shareholders (the “Special Meeting”).
***
Fellow Shareholders,
You are likely aware that Browning West, a long-term and
significant shareholder of Gildan, recently requisitioned a Special
Meeting to provide you the opportunity to vote on a reconstitution
of the Board. We took this step because Gildan’s directors have
destroyed substantial value and jeopardized the Company’s future by
abruptly terminating a proven Chief Executive Officer and
installing a new leader with a clear track record of value
destruction and no articulated strategy. As we had forewarned in
our January 9th letter to shareholders, we
are writing to alert you that the Board is now resorting to
desperate and egregious entrenchment maneuvers to try to deprive
you of the opportunity to replace the directors responsible for
recent missteps and value destruction with Browning West’s highly
qualified director candidates at a Special Meeting.
This past weekend, Browning West was informed that the Board is
seeking to invalidate our requisition under Canadian law for a
Special Meeting based on the false premise that we violated the
U.S. Hart-Scott-Rodino Antitrust Improvements Act of 1976. Although
we would normally just privately address this seemingly flawed and
self-serving allegation, it has become clear to us that the Board
has no respect for corporate democracy or the shareholder
franchise. It is obvious that Browning West poses no substantive
antitrust concerns to any concerned authority, which is why the
Board’s gambit only reinforces our previously articulated case for
removing a majority of directors and specifically: Donald Berg,
Maryse Bertrand, Marc Caira, Shirley Cunningham, Charles Herington,
Luc Jobin, Craig Leavitt, and Chris Shackelton. Despite holders of
approximately 35% of Gildan’s outstanding shares independently
publicizing their support for Browning West’s campaign, these
directors are deploying Gildan’s corporate machinery on
self-serving legal tactics designed to insulate them from
accountability. We know that the Board has hired at least three law
firms, two investment banks, a public relations firm, a proxy
solicitor, and a private investigator. This absurd level of
expenditure is being borne by shareholders and deployed against our
own interests for the simple reason that the Board presumably knows
that if a vote was held today, all eight of our director candidates
would be elected. Meanwhile, every day that Gildan delays the
Special Meeting, the value destruction and risk of permanent damage
to the business continues under the “leadership” of the current
Board.
It is important to highlight that the Board’s troubling conduct
extends well beyond this latest stunt. In addition to spending the
past two weeks publicizing misinformation about Browning West and
Gildan’s founder and former Chief Executive Officer Glenn Chamandy,
the Board has been brazenly dismissing our reasonable requests to
set a date for the Special Meeting. We have also received
unsolicited feedback that the Board has been actively trying to
silence vocal shareholders by sending them threatening and
meritless legal letters. Additionally, it has come to our attention
that Gildan has retained the law firm that Browning West has
continuously engaged since the fund’s inception and been using for
normal-course investment fund work as recently as last week. We
believe that Gildan retained our legal advisor for activism defense
services after we issued our December 14th letter to the Board and
did so without Browning West providing a conflict waiver. This is a
deplorable tactic that poses serious legal and ethical issues, and
we are deeply concerned that Browning West’s confidential
information has been shared with Gildan and its advisors.
Although we want you to be aware of the facts pertaining to the
Board’s disturbing actions, rest assured that Browning West is in
no way deterred or intimidated. Gildan has been one of Canada’s
greatest value creation case studies, but it is unfortunate that
the Board is now turning it into one of Canada’s greatest corporate
governance failures. Despite the Board’s intransigence and clear
desire to avoid being held accountable at a Special Meeting, we are
completely committed to taking all necessary steps, including
through the legal and regulatory channels, to protect our
investment and set a strong foundation for long-term value creation
at Gildan. In our view, the Board’s poor conduct only serves to
validate Browning West’s campaign.
Sincerely,
Usman S. Nabi
Peter M. Lee
***
No Solicitation
This press release is for informational purposes only and is not
a solicitation of proxies. If Browning West determines to solicit
proxies in respect of any meeting of shareholders of the Company,
any such solicitation will be undertaken by way of an information
circular or as otherwise permitted by applicable Canadian corporate
and securities laws.
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 Longacre Square
Partners is serving as strategic advisor to Browning West. 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.
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version on businesswire.com: https://www.businesswire.com/news/home/20240122689267/en/
Browning West info@browningwest.com 310-984-7600
Longacre Square Partners Charlotte Kiaie / Scott Deveau,
646-386-0091 browningwest@longacresquare.com
Carson Proxy Christine Carson, 416-804-0825
christine@carsonproxy.com
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