Jos. A. Bank on Monday said it would not accept the offer of $55 a share from the Men’s Wearhouse, which came from the company it had been trying to buy just weeks before.
The Men’s Wearhouse turned the tables on Jos. A. Bank Clothiers last month after being pursued for months. By turning around and chasing after its former suitor, the Men’s Wearhouse revived the so-called Pac-Man defense, a tactic that gained popularity in the 1980s.
But the Pac-Man defense rarely works. Of about 20 such attempts, only six have resulted in successful deals.
Using virtually the same reasoning that the Men’s Wearhouse did when it rejected Jos. A. Bank’s offer, the company said Monday that the offer was inadequate.
“The company’s board of directors concluded that the price proposed by Men’s Wearhouse significantly undervalued the company and its near and long-term potential and was not in the best interest of the company’s shareholders,†Jos. A. Bank said in a statement.
However, the offer of $55 a share represents a 32 percent premium above Jos. A. Bank’s share price before it made its bid for the Men’s Wearhouse.
“Our board undertook a thorough review and determined that the per share consideration in the proposal made to us by Men’s Wearhouse was simply not in the best interest of our shareholders,†Jos. A. Bank’s chairman, Robert N. Wildrick, said in a statement.
Instead, he said that Jos. A. Bank would continue to review other deals that might help the company.
Shares in the company were down 1.5 percent in premarket trading.
The Men’s Wearhouse could still come back and bid higher for Jos. A. Bank. Retail analysts liked the idea of a combination, and saw more merit in Men’s Wearhouse being the acquirer.
However, relations between the two companies soured over the course of the back and forth.
Men’s Wearhouse could not immediately be reached for comment.
Another round of Pac-Man may have to wait until the new year.
