Hanesbrands Inc. launches $1.1 billion Pacific Brands Limited takeover

Pacific Brands Limited (ASX: PBG) has received a $1.1 billion takeover from NYSE-listed Hanesbrands Inc.

Pacific Brands is the owner of Bonds, Sheridan Tontine, Berlei, Hush Puppy and much more.

Hanesbrands Inc is a New York-listed public company worth the equivalent of $14.3 billion and owns brands such as Champion, Hanes and more.

This morning, Pacific Brands announced it had received a $1.15 per share takeover offer from Hanesbrands, valuing the company at $1.1 billion.

Pacific Brands says the deal represents a 22% premium to its last closing price and compares favourably to prior corporate transactions in the global underwear and basic apparel markets.

As part of the all-cash proposal, Pacific Brands says it intends to pay a 9.4 cents per share fully franked dividend, enabling eligible shareholders to receive up to four cents per share in franking credits. If successful, this amount would be deducted from the cash consideration.

While the deal is expected to have minimal impact on employee numbers, Hanesbrands is expected to sell the Tontine and Dunlop Flooring businesses, or else Pacific Brands will retain them.

“Pacific Brands owns Australia’s leading underwear and home furnishing brands,” Pacific Brand’s Chairman, Peter Bush, said. “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.”

The Pacific Brands’ board unanimously recommended the deal.

“We believe the 100% cash proposal from HanesBrands is compelling and represents an attractive premium to our long term average share price and the implied F16 EV / EBITDA acquisition multiple of 12.0x compares favourably to the multiples paid in other comparable transactions,” Mr Bush added. “The HanesBrands proposal represents an opportunity for Pacific Brands shareholders to realise attractive value for their shares and to de-risk future growth opportunities available to the business.”

The deal is subject to limited conditions, but not subject to financing or due diligence.

Foolish takeaway

Late in May, shareholders can expect to receive the mailed Independent Expert’s report and specific details on the deal. Pacific Brands believe that if the deal goes ahead, the total shareholder return from holding its shares in FY16 would be 265%, and is at the highest price in five years.

The Pacific Brands deal appears likely to complete, so I'm looking for other - faster growing - dividend shares to add to my portfolio, like the one The Motley Fool's expert analysts hand-picked as their best dividend share idea for 2016.

Indeed, our resident dividend experts named their Top Dividend Share for 2016. Not only are the shares dirt cheap, the company is growing and trading on a 5.6% fully franked dividend yield. Simply click here to gain access to this comprehensive FREE investment report, including the name of this fast growing ASX dividend share. No credit card required!

Motley Fool Contributor Owen Raszkiewicz does not have a financial interest in any company mentioned. Owen welcomes -- and encourages -- your feedback on Google+, LinkedIn or you can follow him on Twitter @ASXinvest.

The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

Two New Stock Picks Every Month!

Not to alarm you, but you’re about to miss a very important event! Chief Investment Advisor Scott Phillips and his team at Motley Fool Share Advisor are about to reveal their latest official stock recommendation. The premium “buy alert” will be unveiled to members and you can be among the first to act on the tip.

Don’t let this opportunity pass you by – this is your chance to get in early!

Simply enter your email now to find out how you can get instant access.

By clicking this button, you agree to our Terms of Service and Privacy Policy. We will use your email address only to keep you informed about updates to our website and about other products and services we think might interest you. You can unsubscribe from Take Stock at anytime. Please refer to our Financial Services Guide (FSG) for more information.