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The battle for shareholder support at Gildan Activewear Inc. is heating up, with an activist fund manager and the clothing manufacturer’s ousted co-founder tabling their strategy for boosting the company’s performance ahead of next month’s annual meeting.

Los Angeles-based Browning West published a 57-page presentation on Monday outlining why investors should support their campaign to replace Gildan’s GIL-T board and reinstate former chief executive Glenn Chamandy at the company’s annual meeting, scheduled for May 28.

Browning West said a combination of operational improvements at Gildan, share buybacks and an improved executive compensation scheme could nearly double the company’s stock price to US$60 by the end of next next year and propel it to US$100 within five years.

Gildan board can’t be trusted to oversee sales process, top shareholder Browning West says

In the latest salvo of an increasingly bitter proxy battle, Montreal-based Gildan’s board promptly dismissed the plan, which was published as the company entertains takeover offers.

“This holiday-weekend announcement is not about the future of Gildan, it is a tactic designed to impede the strategic process and front run a compelling and realistic plan,” said spokesperson Simon Beauchemin in an e-mail. “At best, this is an attempt to confuse the market on value. At worst, it is an intentional misrepresentation.”

The average 12-month target price for Gildan shares among equity research analysts who cover the stock is US$40.79.

Gildan’s board dismissed Mr. Chamandy in December over succession and strategy issues, replacing him with Vince Tyra, a former executive at rival Fruit of the Loom. Mr. Chamandy, aged 62, had served as CEO for 20 years.

How Gildan’s new CEO Vince Tyra ended up at the centre of one of Canada’s most bitter corporate battles

Within days of his dismissal, Browning West launched its campaign to overturn the decision. Since then, institutional investors owning approximately 35 per cent of Gildan’s stock, including domestic fund managers Jarislowsky Fraser and Turtle Creek Asset Management, have come out in support of Mr. Chamandy.

As part of Browning West’s presentation on Monday, Mr. Chamandy said he is “looking forward to returning as CEO and confident in this operating plan.”

Browning West’s plan includes improving profits by shifting manufacturing of “fashion basics” such as socks, underwear and T-shirts from Honduras to the company’s newly-built facilities in Bangladesh, which offer lower energy and labour costs. The fund manager wants to increase production of high-profit-margin fleece clothing in Honduras.

Browning West also wants to more than double the amount of cash Gildan uses for shareholder-friendly stock buybacks. Over the past 25 years, Gildan devoted 31 per cent of its cash flow to share buybacks. Browning West proposed the company boost stock buybacks to 68 per cent of its cash flow.

The fund manager also wants to boost Gildan’s debt levels “moderately” to two times its earnings before interest, taxes, depreciation and amortization (EBITDA), and use this cash for share buybacks. In 2023, the company’s debt was 1.5 times EBITDA, and Browning West said “Gildan has historically underutilized its balance sheet.”

Gildan’s board started a formal sales process in February after receiving an unsolicited takeover offer. According to analysts, a number of private equity funds are now in talks to acquire the company. Investment bankers say a leveraged buyout could see Gildan taken private with loans equal to four or five times the company’s EBITDA.

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