Hanesbrands Inc. (HBI) stock surged 6.80% in pre-market trading on Wednesday, following reports that Canadian apparel maker Gildan Activewear is nearing a deal to acquire the U.S. innerwear manufacturer. The potential acquisition could value Hanesbrands at approximately $5 billion, including debt, according to sources familiar with the matter.

The news of the possible takeover has sparked investor interest in Hanesbrands, which has been facing challenges in recent years. The acquisition by Gildan Activewear, known for its T-shirts and activewear, could potentially create a powerhouse in the apparel industry, combining Hanesbrands' strong presence in the underwear and basics market with Gildan's expertise in casual and athletic wear.

Adding to the positive sentiment, Wells Fargo has raised its target price for Hanesbrands from $4 to $5, suggesting improved prospects for the company. While the details of the potential deal are yet to be officially confirmed, the market's reaction indicates optimism about the future of Hanesbrands under new ownership and the possibility of unlocking additional value for shareholders.