Underwear maker Bendon plans to merge with US sleepwear company Naked.
The deal would result in the combined company being a NASDAQ-listed business as Naked already trades on that US exchange.
Naked Brand Group had a closing share price on Thursday of US$1.04 ($1.46), and a market capitalisation of US$6.3 million. Naked shares are now trading at US$1.58 on the back of the merger proposal, released overnight.
Under the deal, almost 119 million Naked shares would be issued to Bendon, representing almost 94 per cent of the US business.
The Naked deal would give Bendon immediate access to US capital markets, enabling it to grow further and provide opportunities for other acquisitions.
Bendon's majority shareholder is Eric Watson's Cullen Investments and the Kiwi businessman said the proposed merger was "an incredible opportunity for Bendon to strengthen its leadership in the industry and drive the continued growth of the business as a consolidator of globally recognised brands".
Bendon executive chairman Justin Davis-Rice said the merger would help the company build on its sleepwear business and represented a significant growth opportunity.
"This is a transformative merger that will create a powerful creative, marketing, operational and capital markets platform," Davis-Rice said.
"As a publicly traded company in the US, we expect to have an opportunity to accelerate our growth and strengthen our position as a global leader in intimate apparel, swimwear, innerwear fashion and lifestyle brands through both organic growth and strategic acquisitions."
For the 2016 financial year, Bendon generated US$100m ($144m) in sales.
Naked, which is headquartered in New York, specialises in mens and womens sleep and loungewear. Its chief executive Carole Hochman would become chief creative officer of the merged company.
Bendon's brands include Heidi Klum Intimates and Swimwear, Stella McCartney Lingerie and Swimwear, Bendon, Bendon Man, Davenport, Fayreform, Evollove, Hickory, Lovable and Pleasure State.
Under the flagship brand name the retailer designs, manufactures and sells men's and women's underwear, intimate apparel, loungewear and sleepwear through retail partners and online.
Watson's investment firm Cullen Investments bought Bendon group in 2002 for $1.90 per share valuing the company at $58.7m. In 2011, Bendon merged with Australian rival Pleasure State for an undisclosed sum in a deal that shrank Watson's stake in the business.
In the latest NBR rich list, Watson was estimated to be worth $420m. Cullen Investments has interests in Bendon, NZ Warriors, Watson Bloodstock and Auckland's Soul Bar and Bistro.
Bendon was founded in New Zealand in 1947 by former naval officer Ray Hurley and his brother Des, a pattern cutter. The company began as a corsetry business, but quickly specialised in underwear after a shortage brought about by the war.
In 1990, supermodel Elle Macpherson partnered with the business, launching Elle Macpherson intimates.
This changed last year to Heidi Klum intimates, with Klum becoming the newest face of the business.
The company's brands are now distributed globally through over 4,000 doors across 34 countries as well as through a growing network of 60 company-owned Bendon retail and outlet stores in Australia, New Zealand and Ireland.
Bendon is headquartered in Auckland and maintains additional offices in Sydney, New York, London and Hong Kong.