Jos. A. Bank Clothiers rejects second revised bid from Men's Wearhouse
28 Feb 2014
US men's apparel retailer Jos. A. Bank Clothiers Inc yesterday rejected a revised cash takeover bid from its larger rival Men's Wearhouse, calling the unsolicited offer as inadequate, but said it was willing to discuss a higher bid.
Earlier this week, Men's Wearhouse raised its offer to $63.50 per share from $57.50, and added it could increase and added that it could potentially increase its to $65 per share if it is able to conduct limited due diligence, if Jos A. Bank terminates the Eddie Bauer deal, and the termination fee costs less than $48 million. (See: Men's Wearhouse once again raises bid for Jos. A. Bank Clothiers)
''On the basis of your unsolicited revised proposal indicating a willingness to pay a higher price subject to certain conditions, our Board has authorized our meeting with you to establish a process that will enable you to advise our Board as to the highest price you are prepared to pay,'' said Jos A Bank in a statement.
Jos A Bank and Men's Warehouse have been targeting each other since October 2013. Men's Wearhouse first rejected an unsolicited bid from Jos A Bank, but turned the tables on it a month later by offering to buy its smaller rival Eddie Bauer for $55 a share.
Last fortnight, Jos A Bank struck the deal to buy Eddie Bauer from private equity firm Golden Gate Capital, for $825 million, a move designed to keep Men's Warehouse at bay in the future (US men's clothing retailer Jos A Bank strikes $825 mn deal to buy out Eddie Bauer).http://www.domain-b.com/industry/Fashion/20140215_clothing.html
It also said that the US Federal Trade Commission (FTC) granted it an early termination of the waiting period under the antitrust laws regarding its proposed acquisition of Eddie Bauer.
Men's Wearhouse has filed a lawsuit against the directors of Jos A Bank alleging that the board had breached its fiduciary duties by adopting a series of unreasonable, shareholder-unfriendly and illegal defensive measures designated to thwart its tender offer.
Jos A Bank yesterday said in a letter to Men's Wearhouse that its board has ''acted in a very careful, thorough and focused manner to evaluate which of various strategic alternatives would create the greatest value for shareholders and serve the best interests of shareholders. Given the careful attention our board has paid to maximising shareholder value, we strongly disagree with your characterisation of our board's actions. Our board continues to believe that significant value will be created for our shareholders in our proposed acquisition of Eddie Bauer and the related issuer tender offer.''
Jos A Bank critised Men's Wearhouse for not addressing the critical issue of the measures taken by it to eliminate the risk to itself and its shareholders, if the FTC were to block the merger with Men's Wearhouse.
Since then Men's Wearhouse has pursued Jos A Bank relentlessly, and last month the board of Jos A Bank rejected its revised sweetened bid of $57.50 saying that the offer significantly undervalued the company and its future prospects.
Founded in 1905 by Charles Bank, an immigrant from Lithuania, Jos A Bank is a designer, manufacturer and retailer of men's classically-styled tailored and casual clothing, sportswear, footwear and accessories.
The Maryland-based company sells its product line through 629 stores in 44 states and the District of Columbia, as well as through a nationally distributed catalogue and an e-commerce website.
Founded in 1973, Texas-based Men's Wearhouse is one of North America's largest specialty retailers of men's apparel.
It operates under its own name Men's Wearhouse, as well as K&G Superstores, an off-price retail chain featuring discontinued items, Moores Clothing for Men, a Canadian chain of men's clothing stores, Twin Hill Corporate clothing and MW Cleaners in the Houston Area.
Men's Wearhouse has market cap of $2.2 billion, annual sales of about $2.5 billion and 1,137 stores, while Jos. A. Bank has market cap of $1.2 billion, annual sales of $1 billion and 623 stores.
