Jan. 17 (Bloomberg) -- Jos. A. Bank Clothiers Inc. told shareholders to reject a $1.61 billion takeover proposal from Men’s Wearhouse Inc., saying it undervalues the company.
The $57.50-a-share offer, higher than a previous bid and a 38 percent premium to the closing price on Oct. 8, isn’t in shareholders’ best interest, Hampstead, Maryland-based Jos. A. Bank said today in a filing. The retailer has said it is seeking its own acquisitions to bolster shareholder value.
The rejection means Houston-based Men’s Wearhouse will have to convince shareholders to accept the tender offer, which expires March 28, if it still wants to acquire its smaller rival. Men’s Wearhouse also has said it will nominate two independent directors to Jos. A. Bank’s board at its 2014 annual meeting.
Men’s Wearhouse remains “committed” to the transaction and is prepared to engage in negotiations, the retailer said in a statement today. It also asked Jos. A. Bank’s independent directors to form a committee to evaluate the takeover offer and start discussions.
Jos. A. Bank rose 0.7 percent to $56.49 at the close in New York today. Men’s Wearhouse fell 1.3 percent to $50.45.
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