Bloomberg the Company & Products

Bloomberg Anywhere Login

Bloomberg

Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.

Company

Financial Products

Enterprise Products

Media

Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000

Communications

Industry Products

Media Services

Follow Us

Jos. A. Bank Rejects Men’s Wearhouse Offer as Too Low

Men's Wearhouse Store
A man stops in front of a Men's Wearhouse Inc. store on 6th Avenue in New York. Photographer: Craig Warga/Bloomberg

Dec. 23 (Bloomberg) -- Jos. A. Bank Clothiers Inc. rejected a $1.54 billion takeover proposal from Men’s Wearhouse Inc. as too low. The shares remained above the offer price, indicating investors expect a higher bid.

The Men’s Wearhouse offer “significantly undervalued” the company and wasn’t in shareholders’ best interest, Hampstead, Maryland-based Jos. A. Bank said today in a statement. The company said it would continue to seek its own acquisitions to boost shareholder value. Men’s Wearhouse said in its own statement today that it still is considering ways to “make this combination a reality.”

Jos. A. Bank’s rejection of the offer represents another turn in a takeover battle that it started in October with a $2.3 billion bid for Men’s Wearhouse. The target rejected that offer and later made its own proposal for Jos. A. Bank. Shares of Jos. A. Bank have traded above Men’s Wearhouse’s $55-a-share offer since it made the bid on Nov. 26 and stayed higher than that price today.

“Jos. A. Bank seems to be open to a higher offer,” Mark Montagna, a Nashville, Tennessee-based analyst at Avondale Partners LLC, said in a phone interview. “There’s probably further negotiations. The top shareholders are similar at both companies, and they’re going to want something to get done.”

Montagna said Jos. A. Bank may be valued at $56 to $61 a share. He has the equivalent of a hold rating on the shares.

Board Nominees

Men’s Wearhouse said it has a “strong preference” to work collaboratively with Jos. A. Bank. The retailer is considering nominating candidates to Jos. A. Bank’s board at the company’s next annual shareholder meeting.

Men’s Wearhouse, based in Houston, fell 0.7 percent to $51.63 at the close in New York. Jos. A. Bank slipped 1.3 percent to $56.29.

Jos. A. Bank may be seeking an offer of more than $60 a share, a price that may be less appealing to Men’s Wearhouse, said Betty Chen, a San Francisco-based analyst at Mizuho Securities.

“It seems they may be positioning themselves for a higher offer,” Chen said in a phone interview today. “At a certain level it does get more risky.”

She has the equivalent of a hold rating on Men’s Wearhouse’s shares.

Tom Davies, a spokesman for Jos. A. Bank who works for Kekst & Co., declined to comment on what price the company may seek.

To contact the reporter on this story: Lindsey Rupp in New York at lrupp2@bloomberg.net

To contact the editor responsible for this story: Robin Ajello at rajello@bloomberg.net

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.