Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search


US underwear giant Hanes seeks Pacific Brands

Thursday 28 April 2016 11:39 AM

US underwear giant Hanes seeks Pacific Brands in A$1.1 bln offer

By Jonathan Underhill

April 28 (BusinessDesk) - New York Stock Exchange-listed HanesBrands has offered to buy Pacific Brands through a scheme of arrangement that values the dual-listed clothing group at A$1.1 billion and has won the support of the target company's board.

HanesBrands is offering A$1.15 a share for 100 percent of Pacific Brands, a 22 percent premium to its last traded price on the ASX and amounting to 2016 enterprise value-to-ebitda (earnings before interest, tax, depreciation and amortisation) multiple of 13.5 times. Pacific Brands would pay a fully franked special dividend of 9.4 Australian cents a share if the transaction proceeds, reducing the cash amount of the offer price but providing up to 4 cents a share for those entitled to the franking credits, it said. Pacific Brands rose 5.4 percent to $1.18 on the NZX, where the shares are thinly traded.

"HanesBrands' unsolicited proposal represents a premium to current trading multiples and compares favourably to prior transactions in the global underwear and basic apparel sector," Pacific Brands said in a statement.

Pacific Brands owns the Sheridan, Bonds, Berlei, Tontine and Dunlop Flooring brands. It returned to profit in its first half and reinstated dividends with a payout ratio of 60 percent. The turnaround marked six years of restructuring, which included selling loss-making brands, shifting production to Asia, and putting more focus on retailing through its own stores.

HanesBrands had indicated the Tontine and Dunlop Flooring businesses were of limited strategic value and would be sold if the deal went ahead. HanesBrands owns brands including Hanes, Champion, Playtex, Maidenform L’eggs and Wonderbra.

"HanesBrands has recognised the work done over the past two years that has seen the board and management team under CEO David Bortolussi’s leadership reshape and simplify the business to focus on our highest quality brands and improve operational performance," said chairman Peter Bush. "That work has resulted in a significant re-rating of the company and its share price. Shareholders now have an opportunity to realise a further increase in value through a compelling proposal."

The proposal was unanimously recommended by the Pacific Brands board pending an independent assessment and in the absence of a superior offer, it said.

Pacific Brands' stock has soared 102 percent in the past 12 months while the S&P/ASX 200 Index fell 13 percent.

HanesBrands stock last traded at US$27.79 and has declined 13 percent in the past 12 months. It is rated a 'buy' based on a Reuters survey.

The scheme of implementation deed requires shareholder approval, expected to be sought at a meeting in late June, and signoff from the Supreme Court of Victoria.

Macquarie Capital (Australia) Limited and Herbert Smith Freehills are advising Pacific Brands.



© Scoop Media

Business Headlines | Sci-Tech Headlines


Fuel Leak: Refinery Prepares To Repair Damaged Pipeline

Refining NZ has confirmed that it is to start repairs on a section of its multi-product fuel pipeline which was shut down following a jet fuel leak last Thursday. More>>uption.htm">More>>


StatsNZ: Economy Grows 0.8% In June Quarter

“Strong export and domestic demand underpinned growth this quarter,” national accounts senior manager Gary Dunnet said. “Demand for exports has resulted in strong production growth in manufacturing and service industries.” More>>


Stats NZ: Annual Net Migration Remains High

Annual net migration was 72,100 in the August 2017 year... Migrant arrivals reached 132,200, a new annual record, and migrant departures were 60,100 in the year ended August 2017. More>>


Expert Reaction: Cassini's Grand Saturn Finale

After a 20 year mission, NASA's spacecraft Cassini will meet its demise this week by plunging into Saturn's atmosphere and burning up. More>>


Jurisdiction: Court Rejects Cathay Unit's Retirement Age Of 55 For Pilots

The Supreme Court has backed two Auckland-based Cathay Pacific pilots who claimed local law meant they couldn't be forced to retire at 55. More>>


Supreme Court: AFFCO Loses Lockout Appeal

The essential question in the appeal was whether those who presented themselves for work at the beginning of the 2015/2016 season were at that time “employees” for the purposes of the lockout provision... This Court has unanimously dismissed the appeal. More>>