Yesterday, after a few tense weeks of speculation, Men’s Wearhouse brushed a huge buyout offer from Jos. A. Bank off like so much lint off of a suit jacket. Men’s Wearhouse apparently felt “undervalued” and said the offer was “opportunistic” and “inadequate”. Ouch.
The combination would have created a men’s wear super power with over 2,000 stores. However, according to AP, JoS. A. Bank isn’t giving up without a fight. They stated that they would continue to persue a deal with Men’s Wearhouse, calling the rejection of their offer “inexplicable”
In a letter dated Sep.18, Robert Wildrick, chairman of JoS. A. Bank, told Douglas Ewert, Men’s Wearhouse’s CEO, he was offering to buy all outstanding shares of Men’s Wearhouse for $48 cash per share, or $2.38 billion in total, saying that he thought the two would make “ideal partners.”
JoS. A. Bank made the offer Sept. 17, pitching the deal to Men’s Wearhouse executives in a phone call and that follow-up letter. During a media call on Wednesday before Men’s Wearhouse issued the statement rejecting the bid, Robert N. Wildrick, JoS. A. Bank’s chairman of the board, said the proposal was a “win-win situation” for shareholders, as well as consumers. He insisted that each company would benefit from the other’s expertise.
“The strategic wisdom of this transaction is compelling,” declared Wildrick. “By combining our two companies, we can together create the best men’s apparel and sportswear designer, manufacturer and retailer in the U.S.” The combined companies, he said, would capture “operating synergies.”
Ewert said in the Men’s Wearhouse statement that he and his board were confident that their recent actions, including their acquisition of boutique brand Joseph Abboud, had left the company well-positioned.
If you don’t quite understand the difference between JoS. A. Bank and Men’s Wearhouse, Brian Sozzi, CEO and Chief Equities Strategies at Belus Capital Advisors sums it up pretty well in this quote, “Men’s Wearhouse is the first place you go right out of college to get a suit, but JoS. A. Bank’s is where you trade up.”
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