Americans could be about to get their hands on Australia's favourite underwear.
US clothing giant HanesBrands has made a $1.1 billion bid for Pacific Brands in a move that would get the Bonds and Berlei brands into bed with a company that already claims to be the world's largest underwear firm.
HanesBrands, which owns numerous labels including Champion and Wonderbra, says it would keep Pacific Brands' management and Bonds design unit in Australia but could make significant savings by using its own existing manufacturing.
The Pacific Brands board has recommended the all-cash $1.15 per share offer, which was made public on Thursday following four months of private negotiations.
The offer for a company that also counts Sheridan linen and Dunlop flooring among its assets represents a 22 per cent premium on Wednesday's closing share price of 94 cents.
"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," Pacific Brands chairman Peter Bush said.
The offer comes as signs emerge that Pacific Brands' plan to turn around sluggish sales and return to profit is 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 after a shake-up that included the sale of underperforming brands including Hard Yakka and Volley shoes.
"Pacific Brands' restructuring and focus on underwear and Sheridan has resulted in significant sales and profit growth," Hanes said in a statement.
If shareholders approve the deal, Bonds will follow iconic brands such as Speedo, Fosters and Arnott's into foreign ownership.
While the takeover is expected to have minimal impact on jobs, Hanes plans to sell the flooring units and Tontine pillow business.
The New York-listed public company is worth $US11 billion and accounts for 80 per cent of the United States' underwear, socks and hosiery market - and 63 per cent of Europe's.
The Bonds brand was also founded by an American immigrant, George Allan Bond, just over a century ago.
"The Bonds business was started by an American from Kentucky who moved to Australia, so in a way the brand is going back to its roots," Mr Bush said.
"Bonds has an interesting international history."
The brand was also co-owned by global private equity firm CVC Asia Pacific and Australian firm Catalyst Investment Management before Pacific Brands floated on the ASX in 2004.
Pacific Brands shifted its manufacturing to China seven years ago.
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