HanesBrands has offered $1.15 cash per share for Pacific Brands, which amounts to a 22 per cent premium to Wednesday’s closing share price of 94 cents.

Pacific Brands, which also owns Berlei and Jockey underwear brands and linen label Sheridan, is urging shareholders to support the offer.

In a statement issued to the Australian share market today, the company said its directors have unanimously recommended the transaction to shareholders.

The group’s chairman Peter Bush said the 100 per cent cash offer was compelling and attractive.

“The 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,” he said.

“HanesBrands can provide Pacific Brands with additional scale, sourcing benefits, financial flexibility and the opportunity to accelerate the growth of iconic brands such as Bonds and Sheridan.”

Bush said the transaction was expected to have limited impact on the group’s continuing operations and employees.

The takeover offer comes after Pacific Brands showed signs its transformation plan to turnaround sluggish sales and return to profit was working.

The group reported a half year net profit of $24.3 million in February, a significant improvement from its $108.7 million loss made in the same period a year ago.

Revenue was up 8.6 per cent to $425.3 million.

The shift in performance came after Pacific Brands reduced its labels, including shedding Hard Yakka and Volley shoes, to focus on its high-growth labels, Bonds and Sheridan.

AAP