Jos. A. Bank drops $2.3B bid for Men’s Wearhouse

Jos. A. Bank withdrew its $2.3 billion offer to buy Men's Wearhouse, although it did not rule out another bid for its larger rival in future.

Jos. A. Bank had warned it would terminate its proposal if the Men's Wearhouse board did not engage in good faith negotiations by Nov. 14.

"(If)… we are invited by the Men's Wearhouse board to discuss our acquisition … or if circumstances were otherwise to change, Jos. A. Bank may consider whether a new proposal to acquire Men's Wearhouse is warranted," Jos. A. Bank said on Friday.

Men's Wearhouse's largest shareholder, hedge fund Eminence Capital, expressed disappointment that the company's board had failed to engage in merger discussions.

Eminence, which owns about 10 percent of Men's Wearhouse, said that by allowing the deadline to expire, the company's board had confirmed it was not committed to fulfilling its basic fiduciary duties to shareholders.

The hedge fund called for a special meeting, saying it wants to give Men's Wearhouse stockholders the ability to remove directors before the next annual meeting.

Jos. A. Bank offered to buy Men's Wearhouse for $48 per share in cash but was swiftly rebuffed by its larger rival, which dismissed the offer as inadequate.

Men's Wearhouse was founded in 1973 by George Zimmer, known to US television audiences for his advertising catchphrase, "You're gonna like the way you look —I guarantee it."

Men's Wearhouse, which ousted Zimmer in June, also adopted a poison pill to prevent a hostile takeover.

A 100-year-old seller of men's tailored and casual clothing, Jos. A. Bank has over 600 stores in the United States, according to the company's website.

Men's Wearhouse is being advised by Bank of America Merrill Lynch, JPMorgan Chase and law firm Willkie Farr & Gallagher.

Goldman Sachs and Financo were Jos. A. Bank's financial advisers and Skadden, Arps, Slate, Meagher & Flom and Guilfoil Petzall & Shoemake its legal advisers.

Men's Wearhouse shares had risen 25 cents to $46.36 at 10:25 a.m. The stock last traded at $35.24 before the offer was announced on Oct. 9.

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