Jos. A. Bank's proposal to acquire its larger rival for USD 2.3 billion was rejected by leaders of Men's Wearhouse. The rejection came just two hours after Jos. A. Bank publicly announced its unsolicited bid to purchase its larger rival for USD 48 per share. The offer was at a 42% premium when it was made in September, according to an Associated Press report.
In a press release, Men's Wearhouse Lead Director of the Board Bill Sechrest said the proposal significantly undervalued the company. Sechrest also said Jos. A. Bank did not take into consideration the growth strategy and potential of Men's Wearhouse.
According to financial news website The Street, the proposal of Jos. A. Bank came after a turbulent year for Men's Wearhouse. In June, Founder and Chairman George Zimmer left the firm. Second quarter net sales also fell 2.3% to USD 647.3 million as compared to the same period a year earlier when it posted sales of USD 662.3 million. Second quarter net earnings also plunged to USD 42.9 million compared to USD 59.4 million in the previous year.
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