Private equity firm Sycamore Partners is exploring an offer for Gildan Activewear Inc., the Canadian clothing manufacturer that owns the American Apparel brand, people familiar with the matter said. 

The New York-based buyout firm has discussed financing options with potential lenders, according to one of the people, who requested anonymity to discuss confidential information. 

Montreal-based Gildan — which is in the middle of an ugly dispute between its board and some of its largest shareholders — confirmed Tuesday that it has received a “confidential non-binding expression of interest to acquire” the company, and has set up a board committee to review the proposal and any alternative transaction. 

The committee and Gildan’s financial advisers contacted a small number of potential buyers, “several” of which have expressed interest in a friendly takeover, the company said, without naming them. Still, “there can be no assurance any transaction will result from these discussions.” 

A representative for Sycamore declined to comment. The firm focuses on retail and consumer investments, and has done deals in Canada before, buying the Canadian retail business of Lowe’s Cos. for about US$400 million in a transaction announced in 2022. 

Gildan has hired Goldman Sachs Group Inc., RBC Capital Markets and Canaccord Genuity Group Inc. to give advise, according to a person familiar with the matter. 

Shares of Gildan surged 10.8 per cent in Toronto trading on Tuesday — giving the company a market value of about $8.6 billion (US$6.3 billion) — before trading was halted. The Globe & Mail was the first to report the interest from possible buyers. 

Gildan’s board has been fighting with several institutional shareholders and former Chief Executive Officer Glenn Chamandy, who was sacked in December over disagreements about the company’s succession plan and strategy. The board hired Vince Tyra, a former Fruit of the Loom executive, to replace him. 

The dissident group of investors, which holds more than one third of Gildan’s shares, is led by Los Angeles-based investment firm Browning West LP. The money manager is seeking to reinstate Chamandy by electing a new board at the company’s annual meeting on May 28.

Browning West is now suing the company and its board, accusing them of disregarding the rights and interests of shareholders.