The board of Jos. A. Bank Clothier's Inc encouraged shareholders of the suit retailer to reject a hostile bid worth $1.61 billion from larger rival Men's Wearhouse Inc, Reuters reported. The smaller retailer labeled the offer as inadequate and opportunistic.
Men's Wearhouse responded by asking the shareholders of Jos. A. Bank to elect its nominees to the board and replace Chairman Robert Wildrick and Chief Executive Officer R. Neal Black. The retailer also encouraged the independent directors of Jos. A. Bank to convene a special committee that would review its $57.50 per share tender offer and start discussions, the report said.
On Friday, Jos. A. Bank said that the offer from its rival significantly underestimated the value of the firm as well as its future prospects.
The hostile bid was undertaken by Men's Wearhouse on January 6, a mere two weeks after its prior $55 per share offer was refused by Jos. A. Bank. The move was geared towards pressuring its smaller competitor to agree to a deal to appease investors looking for a consolidation of the suit men's clothing retailers, the report said.
On Monday, Eminence Capital LLC filed a case in the Delaware Court of Chancery to stop the board of Jos. A. Bank from its refusal to talk about the offer. A key shareholder in both firms, Eminence Capital accused the board of violating its fiduciary duties, the report said.
Jos. A. Bank answered the suit and asked the court to dismiss the case, arguing that the move hampered its ability of looking into alternatives to the merger and hold discussions with other possible acquirers, the report said.
The saga between the two retailers started in October when Men's Wearhouse immediately rejected an offer from Jos. A. Bank to acquire the larger rival for a price tag of $2.3 billion, the report said.
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