Jos. A. Bank Clothiers Inc. (JOSB) said it would consider
raising its $2.3 billion bid for Men's Wearhouse Inc. (MW) if it is
given the opportunity to conduct limited due diligence but warned
it will drop its offer in two weeks if Men's Wearhouse's board
refuses to engage in talks.
The company earlier this month confirmed that it offered $48 a
share in cash for Men's Wearhouse. But the unsolicited takeover
offer, which would create a nationwide powerhouse in men's apparel,
was rejected by Men's Wearhouse's board as undervaluing the
company.
In a letter Thursday to Men's Wearhouse CEO Douglas Ewert, Jos.
A. Bank Chairman Robert Wildrick said an increase to the offer
price is contingent on the result of limited due diligence that
would justify an increase.
"While we believe strongly that our $48 per share cash proposal
represents superior, immediate value for the shareholders of Men's
Wearhouse when compared to the uncertain discounted present value
of your long-term plan, we are nevertheless prepared to consider a
price increase," he said.
If Men's Wearhouse continues refusing to engage in discussions
about the offer, Jos. A. Bank said it will terminate its proposal
Nov. 14 so it can consider other strategic options that it has been
investigating.
That possibility sent shares of both companies lower in recent
trading. Men's Wearhouse slid 6% to $41.05, while Jos. A. Bank was
off 4.8% to $47.44.
Jos. A. Bank also said the increase in the value of Men's
Wearhouse shares since the proposal became public "makes it
obvious" that shareholders strongly support the deal.
Representatives for Men's Wearhouse weren't immediately
available for comment.
The same day it rejected Jos. A. Bank's takeover bid, Men's
Wearhouse adopted a shareholder rights plan to prevent new
investors from gaining sizable control of the apparel retailer.
Write to Nathalie Tadena at nathalie.tadena@wsj.com
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