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<span class="articleLocation”>Canadian apparel maker Gildan Activewear Inc said on Tuesday it had won a bankruptcy auction
to buy U.S. fashion retailer American Apparel LLC for about $88
million in cash.
Gildan’s Toronto-listed and U.S.-listed shares rose more
than 3 percent in morning trading, hitting their biggest
intraday percentage gain in nearly 2 months.
The deal is subject to approval from a bankruptcy court on
Thursday, the company said.
Under the deal, Gildan will acquire the intellectual
property rights related to the American Apparel brand and
certain manufacturing equipment. The company, however, will not
buy any of the 110 American Apparel retail stores.
“With Gildan dominating in the basics category of the $4.5
billion print-wear market, the fashion and performance
categories represent particularly attractive growth
opportunities,” Raymond James analysts said.
Reuters reported late on Monday that the company had won the
bankruptcy auction, which also attracted other bidders such as
California-based apparel maker Next Level.
American Apparel filed its second Chapter 11 in November
with about $177 million in debt after the failure of a
The company had filed for its first Chapter 11 in October
2015, and emerged from bankruptcy early last year.
Guggenheim Securities LLC is acting as Gildan’s financial
adviser, while Sullivan and Cromwell LLP are providing legal
Up to Monday’s close, Gildan’s Toronto-listed stock had
fallen about 11 pct in the last 12 months.
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