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Gildan Activewear Inc.’s entire board has been replaced, and Vince Tyra on Thursday stepped down as president and CEO.
Gildan’s reconstituted board and Tyra sensed time was running out after its activist protagonist won the support of three leading proxy advisory firms.
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Browning West began the week with the advantage after Institutional Shareholder Services (ISS) and Glass Lewis recommended that shareholders vote for the activist’s slate of board nominees. The third leading proxy advisory firm Egan Jones subsequently came to the same conclusion and also supported a full reconstitution of Gildan’s’ board. The week prior, Browning West won the dismissal of lawsuits and claims filed by Gildan against the investment firm. The activist called the Gildan battle the “most expensive proxy fight in Canadian history,” totaling $17.1 million through March 31.
On Thursday, Gildan said the outgoing board appointed Browning West nominees to the board of directors. Their resignations also put a stop to discussions in connection with the sale process of the company.
“The outgoing directors believe that it was in the best interests of all Gildan stakeholders for them to resign and not stand for election at the upcoming Annual Meeting, allowing the new Board to be seated so that it can oversee the company in the most orderly and efficient manner,” Gildan said in a statement. The annual shareholders’ meeting is slated for Tuesday.
The new Gildan board members include former CEO and company cofounder Glenn J. Chamandy. Browning West said that the transition of power at Gildan has commenced to ensure that Chamandy is reinstated as the company’s CEO.
The activist investor also said that “preliminary results indicate that an overwhelming majority of shares have been voted in support of Browning West’s full eight-member slate prior to the Board’s resignation.”
“While we are disappointed that the Board ignored the clear will of its shareholders for so many months and spent tens of millions of shareholder capital in an effort to defend its mistakes, we are nevertheless gratified that the current Board has decided to cease its campaign activities and pave the way for an orderly and conclusive leadership transition,” Browning West cofounders Usman S. Nabi and Peter M. Lee said in a statement. Lee is one of the new board members at Gildan.