Jos. A. Bank Clothiers, Inc. (Nasdaq:JOSB) today sent a letter to
Douglas S. Ewert, President and Chief Executive Officer of The
Men's Wearhouse, Inc., (NYSE:MW) in response to Mr. Ewert's letter
dated January 30, 2014.
The full text of the letter follows:
February 2, 2014
Mr. Douglas S. Ewert President, Chief Executive Officer and
Director The Men's Wearhouse, Inc. 6100 Stevenson Boulevard
Freemont, California 94538
Dear Mr. Ewert:
We, the directors of Jos. A. Bank Clothiers, Inc., are writing
in response to your January 30, 2014 letter. After carefully
reviewing your offer with our financial and legal advisors, we
continue to believe that your offer to acquire Jos. A. Bank
substantially undervalues our Company and that your proposal is not
in the best interests of our stockholders. Accordingly, we see
no benefit in commencing negotiations with Men's
Wearhouse.
Your recent letter makes a number of inaccurate and misleading
claims. These statements call into question the credibility of
Men's Wearhouse's actions in pursuing its offer for Jos. A.
Bank:
- In opposing our proposal in the fall to acquire Men's
Wearhouse, you said very clearly that a combination "raises
significant antitrust concerns." Since making your offer on
November 26, 2013 for Jos. A. Bank, you have not updated your views
regarding the antitrust risk. Should our stockholders assume
that when Men's Wearhouse made its offer it still believed a
combination raised "significant antitrust concerns"? If not,
Men's Wearhouse has yet to explain why the antitrust concerns it
raised just seven weeks before its offer for Jos. A. Bank do not
apply to its offer for Jos. A. Bank. Your silence has been
misleading to both Jos. A. Bank and Men's Wearhouse
stockholders. We believe you have a duty to inform investors
whether, based on your knowledge, your offer can be approved by the
Federal Trade Commission.
- After the FTC issued a second request in connection with its
antitrust review of your offer, you said for the first time, that
you had "expected" to receive a second request. As you know,
it is a very serious step for the FTC to issue a second
request. Our two companies' stockholders should understand
that second requests are issued in less than 2% of all transactions
filed with the government and a high percentage of those
transactions are never completed. If you were expecting a
second request, why did you not warn investors that this was likely
to occur? Had you done so, stockholders could have more fairly
evaluated the conditionality of your offer and been able to trade
in shares of Jos. A. Bank and Men's Wearhouse based on full
information.
We are also surprised about some of the actions that you accuse
us of taking because they are similar to what Men's Wearhouse did
when considering our acquisition proposal. Since we assume you
believe your own conduct was appropriate, we have to question the
credibility of the claims you are now making against us. As with
your failure to explain your flip flop about antitrust, there is a
lack of candor in your failure to explain why you are criticizing
Jos. A. Bank for something that the Men's Wearhouse Board did as
well.
- For instance, you misleadingly refer to Jos. A. Bank's
statements about the advantages of "combining" the two companies as
a reason why Jos. A. Bank should discuss a sale to Men's
Wearhouse. As you know, the statements you cite were very
clearly made in connection with Jos. A. Bank's proposal to buy
Men's Wearhouse. In fact, Jos. A. Bank has never said that a
sale of the Company to Men's Wearhouse is advisable. A review
of our record versus Men's Wearhouse's performance demonstrates
why. If you really think this distinction is not important,
then Men's Wearhouse's Board is guilty of the very thing you are
now accusing us of doing. Remember, your Board steadfastly
refused to engage in discussions with us even when we indicated a
willingness to increase our proposed price.
- You asked our Board to form a special committee of directors to
consider your offer, without mentioning that the Men's Wearhouse
Board did not itself form a special committee to consider Jos. A.
Bank's proposal. We believe there is no reason to form a
special committee. The outside directors of Jos. A. Bank, who
make up a substantial majority of the Jos. A. Bank Board, have
played an active role in the Board's deliberations and decisions
concerning the actions which best serve our stockholders. Your
suggestion of a conflict is baseless -- Jos. A. Bank's entire Board
is focused on one thing: pursuing a strategic plan that drives
stockholder value.
If one reviews the behavior of Men's Wearhouse since it first
received Jos. A. Bank's proposal in October 2013, we think there
are real questions about whether your Board, together with your
largest stockholder, the hedge fund Eminence Capital, are pursuing
an acquisition of Jos. A. Bank for reasons that are very different
from what is in the interests of our stockholders. The facts
raise questions about whether your directors and management made
the offer for Jos. A. Bank in order to avoid a proxy fight by
Eminence that, if successful, threatened the Board's status and
management's jobs. When Men's Wearhouse rejected our
acquisition proposal, Eminence threatened to wage a proxy fight
against Men's Wearhouse. Facing this pressure, Men's Wearhouse
did an abrupt about face and launched its offer for Jos. A.
Bank. Then, shortly after Men's Wearhouse made its offer,
Eminence dropped its proxy fight threat against Men's Wearhouse's
directors.
In the case of Eminence, we believe it has been arguing first
for Jos. A. Bank's acquisition of Men's Wearhouse and then Men's
Wearhouse's acquisition of Jos. A. Bank in order to avoid a
potentially large loss on its high-risk arbitrage play -- buying
Men's Wearhouse shares betting that a deal would happen. If no
deal happens and if the trading price of Men's Wearhouse's shares
drop, Eminence could incur substantial losses for its investors on
the Men's Wearhouse shares it recently acquired. When Eminence
now says it supports Men's Wearhouse's offer, we wonder whether its
principal concern is the serious damage it could suffer to its own
business and reputation if it loses money on its risky investment
in Men's Wearhouse shares.
We continue to take our fiduciary duties to our stockholders
very seriously. As we have stated consistently, our Board is
engaged in a careful and thorough process to determine the best
strategic alternative to maximize value for all of our
stockholders. Given the fact that the Men's Wearhouse's tender
offer does not expire until March 28, 2014, and given the uncertain
delay involved in responding to the second request from the FTC,
our Board's thoughtful process is causing Men's Wearhouse no delay
whatsoever.
We will not compromise on devoting the necessary time and effort
to exercising our best business judgment on behalf of the Jos. A.
Bank stockholders.
Very truly yours,
/s/ Robert N. Wildrick Robert N. Wildrick, Chairman of the Board
Jos. A. Bank Clothiers, Inc.
/s/ Andrew A. Giordano Andrew A. Giordano, Lead Director Jos. A.
Bank Clothiers, Inc.
/s/ Byron L. Bergren Byron L. Bergren, Director Jos. A. Bank
Clothiers, Inc.
/s/ R. Neal Black R. Neal Black, Director Jos. A. Bank
Clothiers, Inc.
/s/ James H. Ferstl James H. Ferstl, Director Jos. A. Bank
Clothiers, Inc.
/s/ William E. Herron William E. Herron, Director Jos. A. Bank
Clothiers, Inc.
/s/ Sidney H. Ritman Sidney H. Ritman, Director Jos. A. Bank
Clothiers, Inc.
About Jos. A. Bank
Jos. A. Bank Clothiers, Inc., established in 1905, is one of the
nation's leading designers, manufacturers and retailers of men's
classically-styled tailored and casual clothing, sportswear,
footwear and accessories. The Company sells its full product line
through 628 stores in 44 states and the District of Columbia, a
nationwide catalog and an e-commerce website that can be accessed
at www.josbank.com. The Company is headquartered in Hampstead,
Maryland, and its common stock is listed on the NASDAQ Global
Select Market under the symbol "JOSB."
Forward-Looking Statements
This communication contains forward-looking statements and
information about our current and future prospects and our
operations and financial results, which are based on currently
available information. The forward looking statements include
assumptions about our operations, such as cost controls, market
conditions, liquidity and financial condition. These statements
also include assumptions about the proposed acquisition of Jos. A.
Bank by The Men's Wearhouse, Inc. ("Men's Wearhouse") through a
transaction (including its disadvantages, results, effects and
timing) that may or may not be realized.
Risks and uncertainties that may affect our business or future
financial results include, among others, risks associated with
domestic and international economic activity, weather, public
health and other factors affecting consumer spending (including
negative changes to consumer confidence and other recessionary
pressures), higher energy and security costs, the successful
implementation of our growth strategy (including our ability to
finance our expansion plans), the mix and pricing of goods sold,
the effectiveness and profitability of new concepts, the market
price of key raw materials (such as wool and cotton) and other
production inputs (such as labor costs), seasonality, merchandise
trends and changing consumer preferences, the effectiveness of our
marketing programs (including compliance with relevant legal
requirements), the availability of suitable lease sites for new
stores, doing business on an international basis, the ability to
source product from our global supplier base, legal and regulatory
matters and other competitive factors.
Additional factors that could cause future results or events to
differ from those we expect are those risks discussed under Item
1A, "Risk Factors," in Jos. A Bank Annual Report on Form 10-K for
the fiscal year ended February 2, 2013, Jos. A. Bank Quarterly
Report on Form 10-Q for the quarter ended May 4, 2013, Jos A. Bank
Quarterly Report on Form 10-Q for the quarter ended August 3, 2013,
Jos A. Bank Quarterly Report on Form 10-Q for the quarter ended
November 2, 2013 and other reports filed by Jos. A. Bank with the
Securities and Exchange Commission (SEC). Please read our "Risk
Factors" and other cautionary statements contained in these
filings. We undertake no obligation to update or revise any forward
looking statements, whether as a result of new information, the
occurrence of certain events or otherwise, except to the extent
required by applicable law, including the requirements of Rule
14d-9(c) under the Securities Exchange Act of 1934, as amended and
Schedule 14D-9. As a result of these risks and others, actual
results could vary significantly from those anticipated in this
presentation, and our financial condition and results of operations
could be materially adversely affected.
Important Information for Investors and
Stockholders
This communication does not constitute an offer to buy or
solicitation of an offer to sell any securities. In response to the
tender offer for the shares of Jos. A. Bank commenced by The Men's
Wearhouse, Inc. and Java Corp., Jos. A. Bank has filed a
solicitation/recommendation statement on Schedule 14D-9 with the
U.S. Securities and Exchange Commission ("SEC"). Any
solicitation/recommendation statement filed by Jos. A. Bank that is
required to be mailed to stockholders will be mailed to
stockholders of Jos. A. Bank. INVESTORS AND STOCKHOLDERS OF JOS. A.
BANK ARE URGED TO READ THE SOLICITATION / RECOMMENDATION STATEMENT
AND OTHER DOCUMENTS FILED WITH THE SEC CAREFULLY IN THEIR ENTIRETY
BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. Investors and
stockholders may obtain free copies of the
solicitation/recommendation statement and other documents (when
available) filed with the SEC by Jos. A. Bank free of charge
through the website maintained by the SEC at www.sec.gov. In
addition, the solicitation/recommendation statement and other
materials related to Men's Wearhouse's unsolicited proposal may be
obtained from Jos. A. Bank free of charge by directing a request to
Jos. A. Bank's Investor Relations Department, Jos. A. Bank
Clothiers, Inc., 500 Hanover Pike, Hampstead, MD 21074,
410.239.5900.
Jos. A. Bank, its directors and certain of its executive
officers and employees may be deemed to be participants in the
solicitation of proxies from stockholders in connection with the
Jos. A. Bank's 2014 Annual Meeting of Stockholders (the "2014
Annual Meeting"). Jos. A. Bank plans to file a proxy statement with
the SEC in connection with the solicitation of proxies for the 2014
Annual Meeting (the "2014 Proxy Statement"). INVESTORS AND
STOCKHOLDERS OF JOS. A. BANK ARE URGED TO READ THE 2014 PROXY
STATEMENT (INCLUDING ANY AMENDMENTS OR SUPPLEMENTS THERETO) AND ANY
OTHER RELEVANT DOCUMENTS THAT JOS. A. BANK MAY FILE WITH THE
SEC WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT
INFORMATION. Additional information regarding the identity of these
potential participants, and their direct or indirect interests, by
security holdings or otherwise, will be set forth in the 2014 Proxy
Statement and other materials (if and when available) filed with
the SEC in connection with the 2014 Annual Meeting. This
information can also be found in Jos. A. Bank's Annual Report on
Form 10-K for the fiscal year ended February 2, 2013, filed with
the SEC on April 3, 2013, and in Jos. A. Bank's definitive proxy
statement for its 2013 Annual Meeting of Stockholders (the "2013
Proxy Statement"), filed with the SEC on May 17, 2013. To the
extent holdings of Jos. A. Bank's securities have changed since the
amounts included in the 2013 Proxy Statement, such changes have
been or will be reflected on Statements of Change in Ownership on
Form 4 filed with the SEC.
Stockholders will be able to obtain, free of charge, copies of
the 2014 Proxy Statement and any other documents, including the
WHITE proxy card, (when available) filed with the SEC by Jos. A.
Bank in connection with the 2014 Annual Meeting through the website
maintained by the SEC at www.sec.gov. In addition, this document
and other materials related to the 2014 Annual Meeting may be
obtained from Jos. A. Bank free of charge by directing a request to
Jos. A. Bank's Investor Relations Department, Jos. A. Bank
Clothiers, Inc., 500 Hanover Pike, Hampstead, MD 21074,
410.239.5900.
INVESTOR CONTACT: |
|
JoS. A. Bank Clothiers, Inc., Hampstead,
Maryland. |
David E. Ullman |
Executive Vice President/Chief Financial
Officer |
410-239-5715 |
|
or Investor Relations Information Request
Website
(http://phx.corporate-ir.net/phoenix.zhtml?c=113815&p=irol-IRHome) |
or Investor Relations Voicemail,
410-239-5900 |
|
MEDIA CONTACT: |
Thomas Davies/Molly Morse |
Kekst and Company |
212-521-4873/212-521-4826 |
thomas-davies@kekst.com |
molly-morse@kekst.com |
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