In a resolute stance, Jarislowsky Fraser Ltd., a substantial shareholder holding nearly 7% of Gildan Activewear Inc., throws its support behind ousted CEO Glenn Chamandy amidst a governance dispute with the company’s board. The Canadian clothing manufacturer faced scrutiny for dismissing Chamandy, with allegations of pursuing high-risk acquisitions.
Jarislowsky Fraser criticizes the board’s decision to remove Chamandy and voices concern over the appointment of a managing partner from US investment firm Coliseum Capital Management. This move, made in exchange for Coliseum’s commitment to favor the company’s board for the next two years, is labeled a «serious governance concern» by Charles Nadim, Head of Research and Portfolio Manager at Jarislowsky Fraser.
This show of support from Jarislowsky Fraser adds significant weight to Chamandy’s public battle with Gildan’s board, echoing sentiments shared by at least eight other investment firms, including Oakcliff Capital, Anson Funds Management, Browning West, Pzena Investment Management, and Janus Henderson.
Gildan Director Luc Jobin, however, contests this shareholder support, asserting that Chamandy’s aspirations for multibillion-dollar acquisitions were deemed highly dilutive to shareholders. Jobin anticipates engaging with shareholders, expressing confidence in a potential reconsideration of their positions.
Despite the ongoing corporate discord, Gildan’s shares experienced a slight uptick, closing at C$46.03 in Toronto. Nevertheless, the uncertainty surrounding the management change prompted Stifel Financial analyst Martin Landry to downgrade the shares, anticipating potential proxy fights and creating substantial distraction for the board and management.
Stay informed as the battle for leadership at Gildan unfolds, shedding light on governance practices and the influence of shareholders in corporate decision-making. Explore the ongoing developments in this high-profile corporate clash.
