Browning West Files Lawsuit Against Gildan and Its Board of Directors to Ensure Shareholder Rights Are Protected at the 2024 Annual Meeting

Published

Believes the Board Continues to Take Oppressive Actions Which Fundamentally Disregard the Rights and Interests of Shareholders

Asserts the Board’s Desperate, Wasteful and Self-Serving Entrenchment Tactics to Date Indicate That the Current Directors Will Do Anything to Preserve Their Current Positions

Requests That the Quebec Court Compel Gildan to Conduct the May 28th Annual Meeting Without Delay and With the Oversight of an Independent Chair to Ensure Shareholders Have the Opportunity to Hold the Current Board Accountable and Elect New Leaders

Files and Mails Information Circular

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, has filed a lawsuit today with the Superior Court of Quebec – Commercial Division (the “Quebec Superior Court”) against Gildan and the Company’s Board of Directors (the “Board”) in order to ensure the rights of shareholders are preserved in connection with the May 28th, 2024 Annual Meeting of Shareholders (the “Annual Meeting”).

Usman S. Nabi and Peter M. Lee of Browning West commented:

“Rather than assume accountability for its value-destructive decisions, we believe that the Board continues to take oppressive actions against shareholders, demonstrating that its priority is self-preservation. We are concerned that the Board will seek to delay the Annual Meeting that has been set for May 28th. This is why we have filed an application with the Quebec Superior Court to ensure that the Annual Meeting proceeds on the scheduled date without delay or interference and that the rights of all shareholders are protected with respect to the vote. In addition to requesting that the Quebec Superior Court compel Gildan to hold the Annual Meeting as scheduled without employing any delay tactics or gamesmanship, we want to ensure all shareholders have their votes counted and that the Annual Meeting be conducted fairly and legally. As such, we are asking that an independent chair be appointed to oversee the Annual Meeting. While we expect Gildan to oppose Browning West’s application, we will not be deterred and will continue to do whatever is necessary to ensure that all shareholders have an opportunity to replace the directors whose decisions have destroyed shareholder value and who have failed to give due regard to the views of investors.”

The lawsuit asserts that Gildan and its Board have acted in a manner that unfairly disregards the rights and interests of shareholders by pursuing a strategy of entrenchment, obfuscation and disparagement of dissenting shareholders, improperly placing their own personal interests ahead of the interests of the Company and its shareholders, contrary to the reasonable expectations of Browning West, including by:

  • Leaking corporate documents and confidential information to journalists and sharing this information with a third-party “governance expert” hired by the Board, while refusing to share those same documents and information with shareholders;
  • Improperly soliciting proxies prior to filing a management information circular;
  • Pursuing a meritless litigation with the primary purpose of undermining and delaying Browning West and Gildan shareholders from exercising their rights;
  • Launching unwarranted public attacks on Browning West and imposing costs associated with defending meritless litigation in a clear attempt to deter and silence shareholders from raising their concerns publicly;
  • Signing a “support agreement,” which was not in the best interest of the Company and includes Board representation rights for a shareholder who has a conflict of interest due to a significant ownership stake in one of Gildan’s largest customers;
  • Attempting to justify its decision to terminate Gildan founder Glenn Chamandy and name Vincent Tyra as Chief Executive Officer with a misleading and evolving set of explanations that directly contradict signed statements in Gildan’s prior annual reports; and
  • Making groundless attacks on Browning West, including false accusations of acting jointly or in concert with other shareholders, and collaborating improperly with Mr. Chamandy while he was Chief Executive Officer of Gildan.

All Gildan stakeholders, including its employees and shareholders, require certainty as to the future direction of the Company, which can only be determined by the Board after the Annual Meeting has been held. The primary objective of this application is to ensure that the Board holds the 2024 Annual Meeting on May 28th without delay and involves an independent third party running the Annual Meeting to ensure a fair and transparent process.

In furtherance of this objective, Browning West has decided that now is the time to take active steps to communicate directly with as many Gildan shareholders as possible and to solicit their support in order to ensure that real and substantive change will come to Gildan. Accordingly, Browning West has filed and commenced the mailing of an information circular.

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.

Browning West info@browningwest.com 310-984-7600 Longacre Square Partners Greg Marose / Charlotte Kiaie, 646-386-0091 browningwest@longacresquare.com Pelican PR Lyla Radmanovich / Mélanie Tardif, 514-845-8763 media@rppelican.ca Carson Proxy Christine Carson, 416-804-0825 christine@carsonproxy.com

Source: Browning West, LP

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