Jos. A. Bank Clothiers announced today that it has pulled its unsolicited offer to purchase The Men's Wearhouse for $48 per share, through a letter from its Chairman, Robert Wildrick, to the CEO of Men's Wearhouse, Douglas Ewert.
Jos. A. Bank said in a statement:
The Men's Wearhouse board rejected our $48 proposal on October 9 and has refused to engage with us since. As a result, we terminated our proposal earlier today in order to consider other strategic alternatives which we have been investigating. We strongly believe that a transaction would be in the best interest of both companies, our respective shareholders, and the industry.
In a press release on Nov. 4, in which Men's Wearhouse responded to the offer from Jos. A. Bank, CEO Douglas Ewert said the reason that the company didn't consider the offer was that the board of directors "concluded that the proposal significantly undervalued Men's Wearhouse and its strong prospects for continued growth and value creation, and was not in the best interests of Men's Wearhouse or its shareholders."
In September, Jos. A. Bank made a bid for Men's Wearhouse that was 40% above its closing price the day before. The proffered deal worked out to $2.3 billion. In addition, on Oct. 31, the company said that it would consider raising the offer of $48 a share if it was allowed to conduct its due diligence, and explore the financial position of Men's Wearhouse. Jos. A. Bank also added that if no discussions occurred before Nov. 14, it would terminate its offer.
Eminence Capital, the largest shareholder of Men's Wearhouse, which owns about 10% of the company, asked the board of directors to consider the offer as it is in their fiduciary duty, according to Jos. A. Bank. However, Jos. A. Bank's Robert Wildrick said, "the MW Board has denied our request for limited due diligence and has failed to engage in any discussions whatsoever regarding our proposal."
Although Jos. A. Bank has officially pulled its offer, WIldrick concluded his letter by noting:
We continue to believe that a transaction between our two companies could be in the best interest of our respective shareholders. If, in the future, we are invited by the MW Board to discuss our acquisition of Men's Wearhouse, or if circumstances were otherwise to change, Jos. A. Bank may consider whether a new proposal to acquire Men's Wearhouse is warranted.
Eminence Capital said in a statement that it was disappointed that the company has yet to have acquisition-related talks with Jos. A. Bank. Eminence said that it made a filing with the Securities and Exchange Commission to potentially call a special meeting of Men's Wearhouse shareholders to vote on some bylaw amendments. Eminence Capital said that if the amendments are approved it would allow stockholders to remove Men's Wearhouse board members without cause before the next annual shareholders meeting.
-- Material from The Associated Press was used in this report.
The article Jos. A. Bank's Offer for Men's Wearhouse Is Officially Off the Counter originally appeared on Fool.com.Fool contributor Patrick Morris has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.