Jos. A Banks Turns Down Acquisition Offer from Men's Wearhouse
Jos. A Bank Clothiers (NASDAQ: JOSB) turned down a $1.5 billion acquistion offer from rival retailer Men's Wearhouse (NYSE: MW) on Monday – saying the bid “significantly undervalued” the century-old company.
In a press statement, Jos. A Bank's chairman, Robert Wildrick, said the company's board determined the Men's Wearhouse proposal “was simply not in the best interest of our shareholders.” He noted, however, that the company was continuing “to review acquisition opportunities that would represent a strong strategic fit.”
For its part, The Men's Wearhouse expressed surprise that its smaller rival had rejected the all-cash acquisition proposal – saying the projected deal had “compelling strategic logic and the potential to deliver substantial benefits to our respective shareholders, employees and customers.”
The announcement is just the latest episode in an occasionally dramatic skirmishes between the two outfits.
This past June, Men's Wearhouse fired George Zimmer, the company's founder, chairman and advertising spokesperson, in a dispute over the company's future.
In September, Jos. A Bank made an unsuccessful $2.3 billion bid to buy Men's Wearhouse, in a deal that would have reportedly created what The Associated Press calls “a menswear powerhouse of more than 1,700 outlets.”
Reuters, meanwhile, reports the retaliatory Men's Wearhouse offer, made last month, was prompted by pressure from Emience Capital LLC, a New York-based hedge fund and the company's largest shareholder.
"Men's Wearhouse offered a very fair deal that provides certainty of value for a business in Jos A. Bank that has an uncertain future, given competitive forces and limited growth prospects," Brian Sozzi, chief executive of Belus Capital Advisors, said in an inteview with the wire service.
"When the team at Jos A. Bank moves beyond its eggnog-induced hangover and hurt feelings,” he added, “I suspect the two companies will merge as it's necessary to prepare both businesses for the future of retailing.”
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