Pacific Brands to be removed from S&P/ASX 200

Pacific Brands sitePacific Brands Limited will be removed from the S&P/ASX 200 index and will be replaced by Eclipx Group Limited, according to the S&P Dow Jones Indices.

The move is subject to shareholder and final court approval after the company will be acquired by Hanesbrands Inc.

The US apparel giant had earlier launched a $1.1 billion takeover bid for Pacific Brands, which also owns Sheridan linen and Berlei underwear, an offer that has been endorsed by the target’s board.

Pacific Brands earlier said the Australian government has no objections to the takeover.

In January 2012, the private equity firm, Kohlberg Kravis Roberts, offered to buy Pacific Brands for $600 million, but the bid was rebuffed.

After rejecting Kohlberg Kravis Roberts in 2012, the Pacific Brands board launched a turnaround strategy, cutting costs, paying down debt, shifting manufacturing overseas and selling off some assets.

For the full financial year in 2015, Pacific Brands recorded a $97.7 million net loss after recovering somewhat from a loss at the halfway point of that year of $120 million.

The Bonds business has increased sales by 40 per cent in the past three years and the retail stores posted a 22 per cent like for like growth in the latest half.

The underwear division, which includes popular brands such as Bonds, Berlei, Explorer and Rio, contributed $269 million of the company’s total $425 million revenues for the latest half.

Sheridan chipped in a further $105 million, representing a 10.2 per cent increase over 2015, underpinned by nine per cent like for like growth in retail stores.

Bonds has 155 stores, while Sheridan has 170, including 107 concessions stores in David Jones in Australia and predominantly in Debenhams and House of Fraser in the United Kingdom.

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