Jos. A. Bank pulls bid to buy Men's Wearhouse
Pedestrians walk by a Jos. A. Bank store in San Francisco.(Photo: Justin Sullivan, Getty Images)
Story Highlights
- Jos. A. Bank pulls $48 per share bid
- Men's Wearhouse rejected request for due diligence
- Jos. A. Bank reiterates deal would have been plus for shareholders
NEW YORK — Men's fashion retailer Jos. A. Bank said Friday that it is terminating its offer to acquire competitor Men's Wearhouse.
In a letter to Men's Wearhouse CEO Douglas Ewert dated today, Jos. A Bank said it was yanking its unsolicited $48 per share all-cash offer it made on Sept. 18, saying Men's Wearhouse failed to "engage in good faith negotiations. Jos. A. Bank had set a deadline of Nov. 14, which was yesterday, for Men's Wearhouse to engage in deal discussions.
Men's Wearhouse shares were down 54 cents, or 1.2%, to $45.58 in pre-market trading. USA TODAY sent an e-mail to MW's investor relations seeking comment.
In the letter, Jos. A. Banks noted that despite its initial bid for Men's Wearhouse, which marked a 40% premium for the shares from the closing price before news of the acquisition plan became public, its offer was rejected by Men's Wearhouse, which called the deal "opportunistic" and "inadequate."
Then, on Oct. 31, Jos. A. Bank informed Men's Wearhouse that it would be willing to sweeten its offer if it was "given the opportunity to conduct limited due diligence." Jos. A. Bank also gave its rival a Nov. 14 deadline to engage in negotiations, or it would pull its offer.
On Nov. 4, in response to the due diligence request, Men's Wearhouse sent out a press release that stated:
"Following receipt of the due diligence request, the Men's Wearhouse Board of Directors met and, in consultation with its outside financial and legal advisors, concluded that it is not in the best interest of the Company's shareholders to provide Jos. A. Bank with access to nonpublic information concerning Men's Wearhouse. In responding to the due diligence request, the Board noted its determination that the highly-conditional Jos. A. Bank $48.00 per share proposal significantly undervalues Men's Wearhouse."
Yesterday's deadline came and passed, according to the Jos. A Bank letter. And given that Men's Wearhouse denied its request for due diligence and failed to engage in negotiations, Jos. A. Bank terminated its offer today.
"We continue to believe the transaction between our two companies could be in the best interest of our respective shareholders," Robert Wildrick, chairman of the board at Jos. A. Bank, said in the letter.
Wildrick, however, kept the lines of communication open, saying Jos. A. bank would consider a new proposal is warranted if Men's Warehouse board's opts to discuss a potential deal.
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Jos. A. Bank sells men's tailored and casual clothing, sportswear and footwear. While it targets a more established male professional, it's known for generous promotions like buying one suit or sport coat and getting three for free.
Men's Wearhouse sells men's sportswear and suits through its namesake chain of stores, as well as the Moores and K&G retail chains. Recently, the Houston company has been going after younger shoppers with suits featuring slimmer silhouettes. It's also trying to raise the average ticket price and announced in July that it's buying upscale Joseph Abboud brand for about $97.5 million in cash.
Contributing: Associated Press