A week after questioning the legitimacy of dissident shareholder Browning West to be able to request the rapid holding of a meeting, Gildan is calling its shareholders for an annual and extraordinary meeting on May 28.
The Montreal clothing manufacturer nevertheless intends to submit a request for a declaratory judgment to a Quebec court on Monday to have Browning West’s request for convening declared void and therefore declare the special meeting of shareholders canceled.
Gildan continues to claim that Browning West illegally accumulated shares of Gildan, thereby undermining its legitimacy to call for a special meeting. Browning West asserts that the Hart-Scott-Rodino Act was not violated because the entity holding Gildan’s shares is not incorporated in the United States and Gildan is not a corporation headquartered in the United States. UNITED STATES.
The American hedge fund Browning West had asked Gildan on January 9 to immediately organize a meeting to hold a vote to reconstitute the board of directors to bring back Glenn Chamandy as CEO after his dismissal on December 10.
The last meeting of Gildan shareholders having taken place last May, the Gildan board of directors said it had decided to combine the annual and special meetings to “avoid multiple meetings dealing with similar issues and situations where there is a real risk of sowing confusion among shareholders and leading to a certain disengagement on their part.
Since the convening request made by Browning West aims to reconstitute the majority of the board with the aim of taking control of the company, Gildan emphasizes the importance of granting all shareholders a “reasonable period of time” to evaluate the proposal of Browning West and understand it well.
The board also contends that the May 28 date will give shareholders the opportunity to evaluate the leadership qualities of Vince Tyra – Glenn Chamandy’s successor – as CEO of Gildan so that they can make the decision “as informed as possible” regarding the choice of the person who represents the best manager to run the company.
Gildan also says that it offered Browning West to hold a meeting with Vince Tyra and requested to meet the candidates proposed by Browning West in order to better understand their points of view and the relevance of their skills. The board says Browning West has so far refused any communication between its candidates and the board.
The board removed Glenn Chamandy from his position as CEO, citing differences over the succession plan and pointing out that Glenn Chamandy wanted to move forward with a risky multibillion-dollar acquisition strategy.
Browning West wants to replace 8 of the 11 current directors. The desired departures are those of Donald Berg, Maryse Bertrand, Marc Caira, Shirley Cunningham, Charles Herington, Luc Jobin, Craig Leavitt and Chris Shackelton.
Browning West proposes to install on the board Glenn Chamandy, the former CEO of United Rentals, Michael Kneeland, a former Nike executive, Michener Chandlee, the finance chief of CN, Ghislain Houle, the former president of Mobilia , Mélanie Kau, the co-founder of Browning West, Peter Lee, a former Walmart executive, Karen Stuckey and the chief financial officer of Rona, JP Towner.
For Browning West, which says it holds an approximate 5% stake in Gildan, it was essential to hold a special meeting without delay to avoid the risk of uncertainty causing permanent damage to Gildan’s stakeholders.
Around ten independent institutional shareholders, controlling approximately 35% of Gildan’s shares, have publicly expressed their opposition to the dismissal of Glenn Chamandy in recent weeks.