Jos. A. Bank said on Friday that it had withdrawn its $2.3 billion takeover bid for Men’s Wearhouse after failing to entice the company into merger talks ahead of a Thursday deadline.
Though Jos. A. Bank left open the possibility of reviving the offer if Men’s Wearhouse changes its mind, the move ends a campaign to combine two of the country’s biggest sellers of men’s suits.
“The MW board has denied our request for limited due diligence and has failed to engage in any discussions whatsoever regarding our proposal,†Robert Wildrick, Jos. A. Bank’s chairman, wrote in a letter to Douglas S. Ewert, the chief executive of Men’s Wearhouse, referring to the company’s ticker symbol. “We are therefore terminating our proposal in order to consider other strategic alternatives which we have been investigating.â€
Jos. A. Bank first proposed a merger of the two retailers in September, offering $48 a share. But Men’s Wearhouse held off on discussions, and after the offer was made public last month dismissed the bid as opportunistic and insufficient.
Men’s Wearhouse instead discussed its own turnaround plan, which it said would raise sales by up to $550 million within three years. It refused entreaties from its unwanted suitor, including threats to go hostile and promises to consider raising its bid.
The absence of talks prompted Eminence Capital, a hedge fund that is Men’s Wearhouse’s biggest investor, to put pressure on the retailer to consider the takeover offer or other alternatives. Earlier this week, Eminence disclosed that the company had promised to review strategic options, including the bid.
But the demise of the merger talks appears to have raised Eminence’s hackles. The firm said on Friday that it planned to call for a special meeting of the retailer’s shareholders. The hedge fund said that it planned to call for new bylaws that would let investors remove directors without cause.
