In the seemingly never-ending takeover war between two of the country’s largest men’s suit retailers, Jos. A. Bank on Friday rejected the latest unsolicited bid from Men’s Wearhouse.
Jos. A. Bank called its suitor’s offer of $57.50 per share “inadequate and opportunistic†in announcing its rejection. Shares of the retailer closed at $56.49 on Friday.
“At this time, the company has a well-developed strategy in place to continue to increase revenue, substantially improve margins and deliver enhanced returns to stockholders,†Robert N. Wildrick, the company’s chairman, said in a statement. “The Jos. A. Bank board strongly urges stockholders to reject the offer and not tender their shares.â€
The two companies have been lobbing bids back and forth for months. In December, Jos. A. Bank rejected a bid of $55 per share from its rival. The move was an about-face in the takeover war, since Jos. A. Bank had been trying to take over Men’s Wearhouse just weeks earlier. Both have reduced their poison pill thresholds to prevent a takeover by the other.
In listing its reasons for saying no on Friday, Jos. A. Bank said that the offer from Men’s Wearhouse didn’t reflect the company’s recent growth, or the $100 million to $150 million in savings Men’s Wearhouse has previously suggested that a merger could yield.
“If this estimate is accurate, the offer does not come close to adequately compensating the company’s stockholders for this purported significant synergy value,†Jos. A. Bank’s statement said.
Jos. A. Bank’s rejection also stated that “Men’s Wearhouse’s true motives are unclear and its commitment to the offer is not credible.â€
Men’s Wearhouse responded soon after to Jos A. Bank’s announcement on its website.
“We remain committed to this transaction and are prepared to immediately engage in good faith negotiations so we can deliver the compelling value of a combination of our companies to our respective shareholders,†the company said.
Escalating the dispute, Eminence Capital took Jos. A. Bank to court earlier this week to try to force the retailer to negotiate exclusively with Men’s Wearhouse. Jos. A. Bank responded on Friday, asking for Eminence’s request to be dismissed.
Eminence Capital, which owns a 4.9 percent stake in Jos. A. Bank and a 10 percent stake in Men’s Wearhouse, has been pushing Jos. A. Bank to do a deal. It had also previously disclosed its intention to nominate two directors for the Jos. A. Bank board, even though Men’s Wearhouse planned to nominate two candidates of its own (either group would replace Mr. Wildrick and the company’s chief executive, R. Neal Black).
