Men's Wearhouse on Wednesday rejected a $2.3 billion nonbinding takeover proposal by Jos. A. Bank Clothiers Inc., despite that its offer price was higher than Men's Wearhouse's closing market price.
Bill Sechrest, Men's Wearhouse lead director, said
in a statement that Jos. A. Bank's unsolicited proposal was “opportunistic, subject to unacceptable risks and contingencies and would deprive our shareholders of the value inherent in Men's Wearhouse for inadequate consideration," The Los Angeles Times reported
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Jos. A. Bank offered the takeover on Sept. 17 for $48 per share, a 42 percent premium above the retailer's closing price. The deal would have made Jos. A. Bank the leading designer, manufacturer, and retailer of menswear in the nation.
Robert Wildrick, Jos. A. Bank's chairman, said in a letter to Men's Wearhouse, according to the LA Times, that the merger would "offer a larger platform from which we can together optimize and expand our real estate footprint, strengthen our merchandising and sourcing capabilities and enhance our omni-channel strategies in a rapidly evolving retail landscape."
Douglas S. Ewert, the Men's Wearhouse chief executive, said in the statement to the New York Times
that the deal was not in the best interest of his company, which will keep on its current course.
"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," Ewert said.
The shattered deal could create competition between the two companies. Men’s Wearhouse has 1,137 stores, and is a big player in the tuxedo rental industry. Jos. A. Bank has 623 stores and known for its discounts, the New York Times pointed out.
In June, the Men's Wearhouse founder and the company's public face George Zimmer was booted as executive chairman
. The company said Zimmer expected veto power over significant corporate decisions and reversed his longstanding position against taking the company private.
Both companies' stocks jumped Wednesday.
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