Pzena escalates Gildan battle, tells board not to delay shareholder vote

Clothing manufacturer Gildan Activewear Inc. is coming under renewed pressure from a major shareholder to organize a vote soon to decide who’s on the board of directors.

Pzena Investment Management Inc. said it supports the efforts of another firm, Browning West LP, to force a meeting of investors at which they would cast ballots on a proposed new slate of directors. 

“We have been speaking with the board and urging them to hold the requisitioned special meeting as soon as possible,” Akhil Subramanian, a Pzena portfolio manager, told Bloomberg. The New York-based firm would be one of the most influential players in a proxy fight, owning 6.5% of Gildan, according to data compiled by Bloomberg. 

Gildan, which is located in Montreal and owns the American Apparel brand, has been embroiled in a messy dispute with key investors over the dismissal of longtime Chief Executive Officer Glenn Chamandy in December. 

Investment firms holding about a third of the shares, including Jarislowsky Fraser and Janus Henderson Group, have publicly said they want Chamandy to come back. Some also want the board replaced, and Browning West has put together a proposed list of eight new directors, to be led by United Rentals Inc. Chair Michael Kneeland. 

But the existing board is digging in for a fight, stating that Chamandy had become a disengaged CEO, that the company needs new ideas and that he wanted to pursue acquisitions that would have been reckless. Chamandy fired back this week with a statement saying their allegations are “false, defamatory and misleading.”

Pzena’s Subramanian said the board must “let the shareholders decide on who they wish to represent them.”

“The board of directors is reviewing the requisition request and will respond within the 21-day deadline,” Genevieve Gosselin, a spokesperson for Gildan, said by email.

Earlier this week, Toronto-based Turtle Creek Asset Management Inc. sent a letter scolding board members. “Your current destructive PR campaign of inferences and innuendo is, quite frankly, embarrassing to the company and to each of you,” wrote the firm.

“For the sake of each of your reputations, and for the sake of the company, we urge you to end it.”