Browning West, LP, which is a long-term shareholder of Gildan Activewear Inc. and beneficially owns approximately 5.0 percent of the company’s outstanding shares, responded to Gildan’s announcement that its Board of Directors has “called” a so-called annual and special meeting of shareholders to be held on May 28, 2024, while also seeking to cancel the special meeting of shareholders. This follows Browning West submitting a valid requisition for the Special Meeting and requesting the Board set a date in March 2024.
As a reminder, Browning West is seeking to reconstitute Gildan’s Board and replace the following directors with ethical and qualified candidates: Donald Berg, Maryse Bertrand, Marc Caira, Shirley Cunningham, Charles Herington, Luc Jobin, Craig Leavitt, and Chris Shackelton.
Usman S. Nabi and Peter M. Lee of Browning West commented:
“Through its actions, including refusing to set a timely date for the Meeting, the Board is once again demonstrating a complete disregard for sound corporate governance and a total lack of respect for the will of shareholders. It appears the Board has learned nothing from its recent string of ill-conceived decisions and publicity stunts, which seem to have only succeeded in alienating shareholders. Indeed, it is as if the Board is oblivious to the fact that holders of approximately 35% of Gildan’s outstanding shares publicly support our campaign and efforts to expeditiously reinstate Glenn Chamandy as Chief Executive Officer. It is clear to us – and presumably to all other Gildan shareholders – that setting a Meeting date nearly five months after receiving a valid requisition for a Special Meeting is a transparent attempt to buy time for a seemingly unqualified Chief Executive Officer with a record of value destruction and an entrenched Board.
With respect to Gildan’s comments regarding Browning West’s requisition and the Company’s planned court application, we are severely disappointed by the Board’s continued attempts to distract shareholders by focusing on a U.S. regulatory question that is entirely irrelevant to our valid requisition under Canadian law. The Board has acknowledged in its own press release that it agrees with the view of a critical mass of shareholders that a speedy resolution of the current situation is in the Company’s best interest, which is precisely what a more urgently called Special Meeting would provide. Why then is the Board choosing to waste shareholder resources on a legal action that does not change the reality that Browning West – and more significantly, ~35% of Gildan’s outstanding shares – clearly support holding a Special Meeting? The Board is also fully aware that Browning West can easily pivot from a Special Meeting and pursue the exact same Board reconstitution through a regular proxy process. The only logical explanation for why the Board is pursuing a legal challenge is that it is being led astray by its high-priced legal advisors, who are economically incentivized to recommend scorched-earth tactics. Any legal action at this point only further impugns the Board’s credibility and will serve as another justification for replacing a majority of the sitting directors. Browning West is considering all of its rights.
The Board should recognize Gildan’s stakeholders have been suffering through a vacuum of credible leadership for almost two months, and each day of delay risks permanent damage to the Company. We urge the Board to reconsider its self-serving decision and hold our requisitioned Special Meeting without unjustifiable delay.”
