Men’s Wearhouse turned thumbs down on a $2.3 billion offer from Jos. A. Bank to buy the giant retailer of mid-market suits and other apparel.
The firms are fierce competitors and among the major US retailers of men’s clothing.
In a recent letter to Men’s Wearhouse, Jos. A. Bank asked for a look at the former’s ledger to see if the numbers would justify an increase in their buy offer to more than $48 a share, a significant premium above the currently-traded price.
No thanks, said Men’s Wearhouse to the unwelcome solicitation to sell. The firm insists that its own turnaround plan will be better for shareholders than an outright sale.
In a recent statement, Men’s Wearhouse CEO Douglas S. Ewert said, “We are enthusiastic about Men’s Wearhouse prospects and are confident that our strategic plan will deliver more value to our shareholders than Jos. A. Bank inadequate, highly conditional proposal.”
Men’s Wearhouse shareholders may disagree with the CEO’s assessment, but as of the first week in November no significant opposition has been publicly voiced.
Nevertheless, Men’s Wearhouse’s share prices recently fell four percent in the wake of the firm’s rejection of the Jos. A. Bank bid.
Assuming Men’s Wearhouse will reject their offer to even talk about a sale and to turn down a share price offer north of $48, Jos. A. Bank chairman, Robert N. Wildrick said his firm would have to abandon its plan to acquire its rival and thus form the largest US retailer of men’s suits.
The Jos. A. Bank offer for Men’s Wearhouse came in the wake of the ouster of George Zimmer, founder and chairman of the company.
Mr. Zimmer had been advocating a plan to take his firm private as part of a turnaround strategy for the ailing company.