Jos. A. Bank Clothiers, Inc. (Nasdaq:JOSB) ("Jos. A. Bank" or the
"Company") said today, in a letter to Douglas S. Ewert the
President and Chief Executive Officer of The Men's Wearhouse, Inc.
(NYSE:MW), that, "In our Board's continuing effort to evaluate
which alternative transaction would create the greatest value for
Jos. A. Bank shareholders, and on the basis of your unsolicited
revised proposal indicating a willingness to pay a higher price
subject to certain conditions, our Board has authorized our meeting
with you to establish a process that will enable you to advise our
Board as to the highest price you are prepared to pay in an
acquisition of Jos. A. Bank."
The letter also states that its Board of Directors, after
careful consideration and discussions with its financial and legal
advisors, has unanimously rejected The Men's Wearhouse Inc.'s
$63.50 per share unsolicited offer as inadequate, after giving
effect to the Eddie Bauer acquisition and related issuer tender
offer, and not in the best interests of Jos. A. Bank stockholders.
The Board recommends that the Company's stockholders reject the
Offer and not tender their shares into the Offer.
The reasons for the Board's recommendations regarding the
amended tender offer price and authorization of a meeting with
Men's Wearhouse are set forth in a Schedule 14D-9 amendment being
filed by the Company today with the Securities and Exchange
Commission, which is also being disseminated to stockholders.
The Jos. A. Bank Board continues to believe that significant
value will be created for shareholders in its proposed acquisition
of Eddie Bauer and the related issuer tender offer.
Also, Jos. A. Bank announced that the Federal Trade Commission
today granted early termination of the waiting period under the
Hart−Scott−Rodino Antitrust Improvements Act of 1976 with respect
to the pending transaction between Jos. A. Bank and Golden Gate
Capital, under which Jos. A. Bank will acquire Everest Holdings
LLC, parent company of the Eddie Bauer brand.
It further stated that the financing for the Jos. A. Bank
acquisition of Everest is proceeding on track, and that the Company
expects to market and place the high yield bonds promptly. The
bridge loan committed to by Goldman Sachs remains fully committed
and, subject to its terms and conditions, will be available to Jos.
A. Bank to finance the Everest transaction.
As a separate matter, Jos. A. Bank continues to provide
additional information regarding its operations and detailed
information on competitive dynamics in the markets in which it
competes with Men's Wearhouse to the FTC in response to the
previously disclosed second request Jos. A. Bank received from the
FTC on February 12, 2014 relating to the tender offer by Men's
Wearhouse for Jos. A. Bank.
The full text of the letter sent to Mr. Ewert follows:
February 27, 2014
Douglas S. Ewert
Chief Executive Officer
The Men's Wearhouse, Inc.
6380 Rogerdale Road
Houston, TX 77072
Dear Doug:
I am writing on behalf of the Board of Directors of Jos. A. Bank
Clothiers, Inc. in response to the press release issued by The
Men's Wearhouse on February 24, 2014 and the related Schedule TO
amendment filed by MW with the Securities and Exchange Commission.
The Board has met twice this week to review your revised offer
carefully, including with its financial and legal advisors, and
that review is ongoing.
The Jos. A. Bank Board has acted in a very careful, thorough and
focused manner to evaluate which of various strategic alternatives
would create the greatest value for shareholders and serve the best
interests of shareholders. Given the careful attention our Board
has paid to maximizing shareholder value, we strongly disagree with
your characterization of our Board's actions. Our Board
continues to believe that significant value will be created for our
shareholders in our proposed acquisition of Eddie Bauer and the
related issuer tender offer. We are also mindful that, unlike
Men's Wearhouse's proposal, there is no antitrust or other
significant obstacle to completing that transaction.
Following our announcement of the Eddie Bauer transaction, Men's
Wearhouse made a meaningful improvement in the price of its offer
to acquire Jos. A. Bank -- after making no change, since November
2013, in its original $55.00 per share price, except for a small
increase to $57.50 on January 6, 2014. As disclosed in our
Schedule 14D-9 amendment filed today with the Securities and
Exchange Commission, our Board of Directors has unanimously
rejected your $63.50 per share unsolicited offer as inadequate,
after giving effect to the Eddie Bauer acquisition and the related
issuer tender offer, and not in the best interests of our
shareholders. However, in our Board's continuing effort to evaluate
which alternative transaction would create the greatest value for
Jos. A. Bank shareholders, and on the basis of your unsolicited
revised proposal indicating a willingness to pay a higher price
subject to certain conditions, our Board has authorized our meeting
with you to establish a process that will enable you to advise our
Board as to the highest price you are prepared to pay in an
acquisition of Jos. A. Bank.
In our meeting, we want to discuss, among other things, the
following issues relating to your proposal:
1. Due Diligence. We are prepared to provide you with a
limited amount of due diligence information as you
requested. However, we would like to know the precise scope of
the limited due diligence you propose to conduct. Given that
we are prepared to provide you with confidential nonpublic
information, a draft confidentiality agreement is enclosed. We
expect you will agree on appropriate safeguards with regard to
competitively sensitive information. We are also prepared to
make available our senior executives as you requested.
2. Transaction Structure. We would like to understand the
structure you contemplate for a transaction, including, as you
proposed, to provide Jos. A. Bank shareholders "the opportunity to
participate in the upside of a combination through an election to
receive Men's Wearhouse stock for a portion of the
consideration".
3. Transaction Certainty. Certainty of closing is a critical
issue we will want to discuss with you. Among other things, in
light of the FTC's pending second request, we will need to
understand what measures Men's Wearhouse will agree to in order to
eliminate the risk to Jos. A. Bank and its shareholders that the
FTC would prevent a transaction between Jos. A. Bank and Men's
Wearhouse from closing. You have consistently failed to
address this issue. As part of our having a full understanding
of this issue, we would want to review the material documents and
presentations you have provided to the FTC.
4. Other Terms. We will provide you with a draft merger
agreement that sets forth the other terms of a transaction in the
next day.
5. Best and Final Offer. Promptly
following completion of your limited due diligence, we would
expect you to advise our Board as to your best and final offer as
to purchase price and other terms, as reflected in a mark-up of the
merger agreement, so that our Board can fully evaluate your
offer.
Time is of essence, and we would like to understand your ability
to proceed quickly with your proposal. Given the compelling
nature of the Eddie Bauer transaction from a shareholder value
creation standpoint, and in light of its certainty of closing, we
are only prepared to give you a limited amount of time to come
forward with your best offer.
Please be advised that, notwithstanding our willingness to
provide you with this opportunity to address the foregoing issues,
the Jos. A. Bank Board has made no determination to sell the
Company, and no determination that your proposal is a Superior
Proposal, as defined in our membership interest purchase agreement
for the Eddie Bauer transaction.
I have instructed our advisors to contact your
advisors.
Very truly yours,
Robert N. Wildrick
Encl.
Goldman, Sachs & Co. and Financo, LLC are serving as
financial advisors to the Company, Skadden, Arps, Slate, Meagher
& Flom LLP and Guilfoil Petzall & Shoemake, L.L.C. are
serving as legal advisors and Innisfree M&A Incorporated is
serving as proxy solicitor.
ABOUT JOS. A. BANK
Jos. A. Bank Clothiers, Inc., established in 1905, is one of the
nation's leading designers, manufacturers, retailers and direct
marketers of men's classically-styled tailored and casual clothing,
sportswear, footwear and accessories. The Company sells its full
product line through 629 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, Md., and its common stock is listed on the NASDAQ under
the symbol "JOSB."
FORWARD-LOOKING STATEMENTS
This press release 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 control, market
conditions, liquidity and financial condition. These statements
also include assumptions about our previously announced proposed
acquisition of Everest by Jos. A. Bank (including its advantages
and disadvantages, potential synergies, 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 the Jos. A. Bank Annual Report on Form 10-K
for the fiscal year ended February 2, 2013, the Jos. A. Bank
Quarterly Report on Form 10-Q for the quarter ended May 4, 2013,
the Jos. A. Bank Quarterly Report on Form 10-Q for the quarter
ended August 3, 2013, the 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 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 and 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 press release,
and our financial condition and results of operations could be
materially adversely affected.
ADDITIONAL INFORMATION
This press release 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
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.
ISSUER TENDER OFFER
THIS PRESS RELEASE IS FOR INFORMATIONAL PURPOSES ONLY AND DOES
NOT CONSTITUTE AN OFFER TO BUY OR THE SOLICITATION OF AN OFFER TO
SELL SHARES OF JOS. A. BANK'S COMMON STOCK. THE TENDER OFFER IS
BEING MADE ONLY PURSUANT TO THE OFFER TO PURCHASE, LETTER OF
TRANSMITTAL AND RELATED MATERIALS THAT THE COMPANY DISTRIBUTED TO
ITS STOCKHOLDERS AND FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION (THE "SEC"). STOCKHOLDERS AND INVESTORS SHOULD READ
CAREFULLY THE OFFER TO PURCHASE, LETTER OF TRANSMITTAL AND RELATED
MATERIALS BECAUSE THEY CONTAIN IMPORTANT INFORMATION, INCLUDING THE
VARIOUS TERMS OF, AND CONDITIONS TO, THE TENDER OFFER. STOCKHOLDERS
AND INVESTORS MAY OBTAIN A FREE COPY OF THE TENDER OFFER STATEMENT
ON SCHEDULE TO, THE OFFER TO PURCHASE, LETTER OF TRANSMITTAL AND
OTHER DOCUMENTS THAT THE COMPANY WILL SHORTLY BE FILING WITH THE
SEC AT THE SEC'S WEBSITE AT WWW.SEC.GOV OR BY CALLING INNISFREE
M&A INCORPORATED, THE INFORMATION AGENT FOR THE TENDER OFFER,
AT THE TELEPHONE NUMBERS SET FORTH BELOW. STOCKHOLDERS AND
INVESTORS WHO HAVE QUESTIONS OR NEED ASSISTANCE MAY CALL GOLDMAN,
SACHS & CO. DIRECT AT (212) 902-1000 OR TOLL-FREE AT (800)
323-5678 OR INNISFREE M&A INCORPORATED TOLL-FREE AT (888)
750-5834 OR (212) 750-5833.
CONTACT: Media:
Thomas Davies/Molly Morse
Kekst and Company
212-521-4873/212-521-4826
thomas-davies@kekst.com
molly-morse@kekst.com
Investment Community:
David E. Ullman
EVP/CFO
410-239-5715
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