Jos. A. Bank rejects Men's Wearhouse takeover offer

Mon Dec 23, 2013 12:41pm EST
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By Aditi Shrivastava

(Reuters) - Jos. A. Bank Clothiers Inc JOSB.O has rebuffed a $1.5 billion takeover bid by Men's Wearhouse Inc MW.N, prompting its larger rival to explore other ways to satisfy investors' hunger for a merger of the suit retailers.

Shares of Men's Wearhouse fell about 1 percent on Monday after Jos. A. Bank rejected its offer, the latest move in a protracted battle between two retailers intent on playing the lead role in the creation of a combined entity.

"I expect this tug-of-war to persist for some time," Anthony Michael Sabino, a professor at St. John's University's Peter J. Tobin College of Business, told Reuters.

Fremont, California-based Men's Wearhouse last month offered $55 per share for Jos. A. Bank, turning the tables on its smaller rival only weeks after Jos. A. Bank had bid for Men's Wearhouse.

The retaliatory offer from Men's Wearhouse - an unusual tactic known as the Pac-Man defense after a 1980s video game - followed pressure to merge from its largest shareholder, New York-based hedge fund Eminence Capital LLC.

A combined company would have 1,700 stores that sell suits and rent tuxedos, a scale that has in the past raised antitrust questions about a merger.

In a statement on Monday, Jos. A. Bank said its board had unanimously rejected the offer.

"Our board undertook a thorough review and determined that the per-share consideration in the proposal made to us by Men's Wearhouse was simply not in the best interest of our shareholders," said the company's chairman, Robert Wildrick.   Continued...