A market analyst believes investors may have seen “blood in the water” at Gildan Activewear and decided to take advantage with a push to buy the company.

On Tuesday, Gildan revealed it was exploring a possible sale as the company has embroiled in a tense dispute between its main shareholders over the dismissal of former CEO Glenn Chamandy. Now, sources told Bloomberg News that private equity firm Sycamore Partners is considering a bid for the clothing brand.

David Swartz, senior equity analyst at Morningstar Research Services, told BNN Bloomberg that companies may be looking to bounce on the company tumult.

“It appears that this was a completely unsolicited offer, there's no indication that Gildan's board was actually trying to sell the company until apparently, someone came forward with an offer, probably smelling blood in the water with all the controversy between the board and the shareholders,” he said in a television interview on Wednesday.

“It seems like Gildan's board had to do a pretty big shift there and decide whether to pursue this acquisition, and it seems like the prices that are being discussed are strong enough that the board really couldn't ignore the offer and now they're going to have to pursue it.”

Browning West, an investment firm with a roughly five per cent stake in Gildan that’s trying to reinstate Chamandy, said it was “naturally concerned” to hear of the news, and that the “current ‘lame duck’ board” is not equipped to evaluate any sale offers.

Browning West also mentioned a rumoured price of US$42 per share, saying shareholders should be “dismayed” but the offer.

Meanwhile, Swartz believes the rumoured price is a “strong offer” and should give Browning West reason for optimism.

“That's well above my fair value estimates for the company,” he said. “I value Gildan right now at only US$31, so a US$42 take-out price, I believe that would be the all-time high.”

“If that comes to pass, then I think that's a good outcome and I don't know what Browning West is now complaining about it.”

Given the challenges between shareholders and executives, Swartz believes a sale may be the best option for all sides.

“This could be probably the best scenario, the best way out of this mess, because right now the board and the shareholders, especially Browning West, are at a complete impasse, and there doesn't seem to be any room for negotiation,” he said.

“A sale of the company would at least end the whole controversy over who's going to control Gildan.”

Robert McFarlane, a corporate governance director and former CFO of Telus, told BNN Bloomberg that the latest developments at Gildan were not a surprise.

“This has played out exactly as I expected,” he said. “Browning West … they would expect this to have been a possible outcome as well. So it’s been the activists’ playbook if you will.”

McFarlane added that Gildan is right to do its due diligence on any serious offers.

“If they received unsolicited offers, they need to get advice, which they’re doing, evaluate those and decide whether it’s in the best interest of shareholders and other stakeholders,” he said. 

With files from Bloomberg News