08:01 AM EDT, 03/20/2024 (MT Newswires) -- Gildan Activewear Inc. ( GIL ) is an appealing asset that could attract several buyers and investors could be interested in a private sale, CIBC Capital Markets said on Wednesday.

Shares of the Montreal-based clothing manufacturer rose 10.8% on the Toronto Stock Exchange Tuesday, after the company said it received a "non-binding expression of interest" from an unnamed potential acquirer.

"In our view, Gildan is an attractive asset and could appeal to several parties," CIBC analyst Mark Petrie said in a note to clients.

"...It's healthy margins, modest leverage, and robust cash flow would also be appealing to private equity players," Petrie said.

"The May 28 AGM presents somewhat of a binary outcome for shareholders and with that backdrop, we believe many investors would be open to a privatization that could potentially leave some upside on the table, but eliminate potentially material downside scenarios," the analyst said.

Petrie maintained an Outperformer rating and US$41 price target on Gildan shares.

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