Gildan Activewear Inc. (TSX:GIL)'s board has put the clothing manufacturer up for sale and private equity funds are circling, escalating a three-month battle for control of one of the country?s largest consumer product companies. Within the past two months, Montreal-based Gildan has received a takeover approach from a potential buyer and responded by giving investment banks RBC Capital Markets and Goldman Sachs Group Inc. a mandate to look for additional bidders, according to two sources. The Globe and Mail is not naming the sources because they are not permitted to speak publicly on the matter.

Gildan confirmed that the company is open to a takeover. The board formed a special committee that decided it was ?in the best interests of Gildan to contact other potential bidders with a view to maximizing the value of any potential transaction,? company spokesperson Simon Beauchemin said in a statement.

?Several of these counterparties expressed an interest in considering a potential friendly transaction with Gildan,? Mr. Beauchemin added. ?There can be no assurance any transaction will result from these discussions, and Gildan will continue to provide updates as appropriate.?

The Gildan board has hired investment bank Canaccord Genuity Group Inc. to advise an independent committee of directors on whether any bid represents fair value for shareholders, the sources said. Gildan currently has a $5.7-billion market capitalization. One of the sources said a potential buyer would likely need to pay more than $7-billion, or more than $42 per share, to acquire the company and take it private.

Early March 19, 2024, Gildan shares were trading for about $34 on the New York Stock Exchange. Later in the day, trading was briefly halted after the publication of a Globe and Mail article on the potential sale. When trading resumed, Gildan?s stock price jumped by 10%, to close above $37.

At least three U.S. private equity funds are each currently trying to raise up to $5-billion in debt from banks and bond markets to fund a Gildan takeover, according to the sources, as well as documents that would-be bidders are sending to banks as they attempt to line up loans. Those documents were obtained by The Globe. Potential bidders for Gildan include Boston-based Bain Capital, LP, which has made a number of successful investments in Canadian consumer product companies, and Sycamore Partners Management, L.P., a New York-based private equity fund that specializes in retail and consumer businesses, the sources said.

In 2023, Sycamore acquired 450 Rona stores in Canada when Rona?s U.S. parent, Lowe?s, decided to exit the market. Bain previously backed a successful sports apparel buyout by Gildan?s newly appointed chief executive officer, Vince Tyra. Bain also owned a stake in Dollarama Inc., and still owns part of Ski-Doo and Sea-Doo maker BRP Inc.