Following a heated back-and-forth between Jos. A. Bank and the Men’s Wearhouse, which culminated in an ultimatum, Jos. A. Bank Clothiers has terminated its acquisition proposal.
As previously reported, Jos. A. Bank had advised the Men's Wearhouse board that it would terminate its all-cash proposal to purchase the company for $48 per share if the board failed to “engage in good faith negotiations” by Nov. 14. The day came and went and the companies continued in a deadlock.
Although Jos. A. Bank maintains that the transaction would have been in the best interests of the respective shareholders for both companies, the chairman of its board, Robert N. Wildrick, sent Men’s Wearhouse CEO Doug Ewert a letter confirming the termination of its acquisition proposal.
The retailer, which operates through 629 stores in 44 states and the District of Columbia, did not burn bridges, however, adding in its statement that if the Men's Wearhouse board should ever change its mind regarding the company’s acquisition, Jos. A. Bank would consider the possibility of making a new proposal.
The full text of the letter to Men's Wearhouse follows.
November 15, 2013
Mr. Douglas S. Ewert,
Chief Executive Officer
The Men's Wearhouse, Inc.
6100 Stevenson Boulevard
Freemont, California 94538
On September 18, 2013, Jos. A. Bank made a confidential, non-binding proposal to acquire all of the outstanding shares of Men's Wearhouse for $48 per share in cash. Despite the more than 40% premium-to-market (based on the closing price of Men's Wearhouse's shares the day before we made our proposal), the Board of Directors of Men's Wearhouse (the "MW Board") rejected our proposal, claiming that it undervalued Men's Wearhouse. On October 31, 2013, we informed you that Jos. A. Bank would be willing to consider raising our proposed acquisition price if we were given the opportunity to conduct limited due diligence. We further informed you that if the MW Board had not engaged in good faith discussions with us by November 14, 2013, we would terminate our proposal. The MW Board has denied our request for limited due diligence and has failed to engage in any discussions whatsoev