The board of directors of Jos. A. Bank Clothiers Inc (NASDAQ:JOSB) unanimously rejected the proposal of The Men’s Wearhouse, Inc. (NYSE:MW) to acquire the company after conducting a thorough evaluation with the help of its legal and financial advisors.
Jos. A. Bank explains Men’s Wearhouse’s offer
The retailer explained that the amount offered by its competitor significantly undervalued the company, its near and long-term potential, and it is not in the best interest of its shareholders. The board of directors also reiterated its previous statement that it is considering other potential strategic acquisitions to boost significant value for shareholders.
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In a statement, Robert N. Wildrick, chairman of Jos. A. Bank Clothiers Inc (NASDAQ:JOSB) said, “Our board undertook a thorough review and determined that the proposal made to us by The Men’s Wearhouse, Inc. (NYSE:MW) was simply not in the best interest of our shareholders.”
Wildrick added, “At the same time, we continue to review acquisition opportunities that would represent strong strategic fit with our company and provide opportunity to leverage our core competencies to drive meaningful growth, synergies, and substantial value creation over the long-term.”
Men’s Wearhouse offer for Jos. A. Bank
The Men’s Wearhouse, Inc. (NYSE:MW) offered to acquire Jos. A. Bank Clothiers Inc (NASDAQ:JOSB) for $55 per share in cash of $1.2 billion (enterprise value). The proposed acquisition was a 32% premium to the closing price of the shares of Jos. A. Bank on October 8 or a 45% premium to its unaffected enterprise value.
Prior to that, Jos. A. Bank Clothiers Inc (NASDAQ:JOSB) submitted an unsolicited bid to acquire The Men’s Wearhouse, Inc. (NYSE:MW) for $48 per share or $2.3 billion. However, the board of directors of The Men’s Wearhouse rejected the offer citing that the offer significantly undervalued the company and it is not in the best interest of its shareholders. Its lead director, Bill Sechrest said the Jos. A. Bank’s proposal was “opportunistic.”
Eminence Capital’s stake in Men’s Warehouse
Eminence Capital LLC, one of the largest shareholders of The Men’s Wearhouse, Inc. (NYSE:MW) with 9.8% stake in the company was disappointed by the company not engaging in negotiations with Jos. A. Bank.
The shares of Jos. A. Bank Clothiers Inc (NASDAQ:JOSB) were trading around $56.66 per share, down by 0.66% around 11:53 in the morning in New York.