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Jos. A. Bank board rejects bid from Men’s Wearhouse

The board of directors for Jos. A. Bank Clothiers Inc. recommended Friday that stockholders refrain from selling shares to The Men’s Wearhouse Inc.

In the announcement, Jos. A. Bank repeated that the company will still consider acquisitions as a way of maximizing shareholder value. (The Daily Record / Rich Dennison)

The board determined the Wearhouse’s offer of $57.50 in cash per share was inadequate and significantly undervalued the company, Bank chairman Robert N. Wildrick said in a statement.

The company cited several reasons, including a statement from its financial advisor, Goldman Sachs & Co., that the deal is inadequate. It also said the offer fails to compensate shareholders for the cost-saving synergies Men’s Wearhouse has said the deal would create.

“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,” said Wildrick said in the statement. “The Jos. A. Bank Board strongly urges stockholders to reject the Offer and not tender their shares.”

In a response to Bank’s rejection, Men’s Wearhouse issued a statement Friday urging the independent directors of Jos. A. Bank to form a special committee to evaluate the offer.

“Jos. A. Bank shareholders should question why their Board is refusing to negotiate with us to reach an agreement that will deliver them significant value,” the statement said.

Men’s Wearhouse also stated that it plans at Bank’s annual shareholders meeting to nominate two independent candidates to replace Wildrick and CEO R. Neal Black on Bank’s board of directors.

In the announcement, Jos. A. Bank repeated that the company will still consider acquisitions as a way of maximizing shareholder value.

Bank had originally offered to buy The Men’s Wearhouse in September. Wearhouse declined, and then proposed its own acquisition of Bank in November. Bank turned that down, then took measures to protect from a hostile takeover.

A few days later, Men’s Wearhouse made the most recent offer.

Deans & Lyons, a Texas law firm, announced Friday that it plans to investigate Bank’s board of directors to determine whether the board is acting in the best interest of shareholders.

Eminence Capital, which owns about 10 percent of Men’s Wearhouse’s stock and about 5 percent of Bank’s stock, announced Monday that it had filed a complaint with the Court of Chancery in Delaware, seeking an injunction on any actions Bank might take to prevent acquisition by Men’s Wearhouse. The complaint says that Bank’s directors have breached their fiduciary duties by rejecting a merger, in the interest of their positions on the board.