Men’s Wearhouse Rejects Jos. A. Bank’s $2.3 Billion Offer

Oct 10, 2013 8:01 AM  By

Men's Wearhouse and Jos. A. Bank logosThe Men’s Wearhouse’s Board of Directors voted Oct. 9 to reject an unsolicited, non-binding proposal from Jos. A. Bank to acquire Men’s Wearhouse for $48 per share in cash.

According to Jos. A. Bank, the $2.3 billion deal would create the largest men’s apparel, manufacturer and retailer in the U.S., and is a 42% premium to the closing price of Men’s Wearhouse common stock on Sept. 17.

Jos. A. Bank made the proposal to Men’s Wearhouse in a telephone call and follow-up letter from Robert N. Wildrick, Chairman of the Board of Jos. A. Bank, to Douglas S. Ewert, Chief Executive Officer of Men’s Wearhouse.

“The Board and management team are confident that continuing our strategic plan will create more value for shareholders than Jos. A. Bank’s inadequate, highly conditional proposal,” Men’s Wearhouse’s Ewert said in a press release.

Ewert said Men’s Wearhouse has undertaken a number of strategic initiatives to accelerate growth and profitability, including its recent acquisition of JA Holding Inc. and the Joseph Abboud brand.
In a separate press release, Jos. A. Bank called Men’s Wearhouse’s rejection of the offer “inexplicable.”

Jos. A. Bank said the transaction is expected to be funded by a combination of cash on Jos. A. Bank’s balance sheet, new equity capital and debt financing. The new equity will be provided by private equity firm Golden Gate Capital. Goldman, Sachs & Co. has informed Jos. A. Bank that, subject to customary terms and conditions, it is highly confident that the debt financing can be obtained in the capital markets.

Jos. A. Bank’s investor presentation regarding the Men’s Warehouse proposal can be found below.

JoS. a. Bank Investor Presentation Regarding Men’s Wearhouse Proposal