It came as no surprise Friday afternoon that the board of Jos. A. Bank Clothiers rejected the unsolicited tender offer by its archrival The Men’s Wearhouse. Bank said MW’s “true motives are unclear and its commitment to the offer is not credible.”
It also shot back at Eminence Capital, the activist investor that is pushing for the deal. Earlier this week, Eminence filed suit in the Court of Chancery in Delaware seeking a preliminary injunction that would prevent Bank from, among other actions, making an “ill-advised acquisition” that could hurt the value of Bank’s shares and risk “killing” what Eminence has in the recent past viewed and continues to view as an attractive combination.
Bank responded Friday by filing a motion with the Delaware court to dismiss Eminence’s lawsuit. Bank contends that Eminence’s insistence that it “negotiate and enter a deal with the first company that walks through the door with an offer, interferes with the board’s ability to explore alternatives and engage in discussions with other potential suitors.”
Bank also took a swipe at Eminence’s motives in the motion, saying that it had purchased “a significant amount of stock in Men’s Wearhouse prior to news hitting the market that [Jos. A. Bank] had made an offer to acquire Men’s Wearhouse, which caused the price of Men’s Wearhouse stock to increase. The company’s offer was ultimately rebuffed, and [Eminence] is now left with the risk that if no transaction occurs between the company and Men’s Wearhouse, and Men’s Wearhouse’s stock returns to the level at which it traded before the company’s offer, [Eminence] will be facing a significant loss for its investors.”
Eminence holds just less than 10 percent of Men’s Wearhouse stock and approximately 5 percent of Bank. On Friday, Eminence said it was declining comment at this time.
That’s not the case with Men’s Wearhouse. Within an hour of Bank’s rejection of its tender offer, MW said it “remain committed to this transaction.” It also called on the Jos. A. Bank board to form a special committee to evaluate the offer.
In a statement on Friday after the close of the market,Jos. A. Bank said that after careful consideration and discussions with its financial and legal advisers, it had “determined that the unsolicited, highly conditional tender offer from The Men’s Wearhouse, Inc. to acquire all outstanding common shares of the company at a price of $57.50 per share in cash is inadequate from a financial point of view and not in the best interest of Jos. A. Bank’s stockholders.”
Bank went on to recommend that its stockholders reject the offer.
Robert N. Wildrick, chairman of Jos. A. Bank, said, “Our board of directors firmly believes that the Men’s Wearhouse offer is inadequate and significantly undervalues Jos. A. Bank and its near- and long-term potential....At this time, the company has a well-developed strategy in place to continue to increase revenue, substantially improve margins and deliver enhanced returns to stockholders. The Jos. A. Bank board strongly urges stockholders to reject the offer and not tender their shares.”
On Jan. 6, Men’s Wearhouse, which has been mired in a back-and-forth battle to acquire or be acquired by Bank since the fall, commenced a cash tender offer to acquire all the outstanding shares of Bank for $57.50 a share, or about $1.61 billion, 4.5 percent higher than the $55 a share, or $1.54 billion, offered in November and rejected by Bank’s board on Dec. 23. Unless extended, the offer to buy Bank’s shares is scheduled to expire at 5 p.m. EST on March 28.
Men’s Wearhouse delivered notice to Bank that it will nominate two independent director candidates for election to the company’s board at its 2014 annual meeting.
Its statement Friday read in part: “Unfortunately, the Jos. A. Bank board of directors has repeatedly refused to commence discussions regarding our premium offer to acquire the company. Given that the Jos. A. Bank board has publicly acknowledged the compelling strategic logic of this transaction, we think Jos. A. Bank shareholders should question why their board is refusing to negotiate with us to reach an agreement that will deliver to them significant value.” MW urged shareholders to vote to replace Wildrick and Neal Black, president and chief executive officer of the company, when they run for reelection at the annual meeting later this year.
“We firmly believe the offer is inadequate and significantly undervalues the company on a near- and long-term basis,” said Gilbert Harrison, chairman of Financo, and financial advisor to Jos. A. Bank. “And it’s opportunistic.” He said he and Bank continue to consider strategic alternatives, including acquisitions, to maximize stockholder value.
Shares of Jos. A. Bank on Friday rose 0.7 percent to $56.49, while MW shares fell 1.3 percent to $50.45. The Bank board’s rejection of MW’s tender offer and MW’s response both came after the markets closed.
“Azzedine has been one of the biggest influences in my life. He has always been such a strong, loving, fatherly figure to me. I call him Papa. His designs are indescribably unique, they are pieces of art. He knew how to make the female form look its loveliest. I have so many memories of him; my favorite might be during my first show with him in Paris. He liked me and he wanted to help me get more work. He called all his friends at Kenzo and Comme des Garcons, and asked them to book me. They said, ‘But she can’t walk!’ And he said, ‘but she has such a great ass!' His friendship and support has been the great privilege of my career. I can't imagine life without him. Repose en paix mon Papa.” - @stephanieseymour tells @wwd. #wwdfashion (📷: @steveeichner) #alaia #azzedinealaia
Azzedine Alaïa, flanked by two of his closest friends, models Stephanie Seymour and Naomi Campbell.
He designed Seymour’s dress for her 1995 wedding to Peter Brant, and treated Campbell (who famously called him Papa), like a daughter. For more on the legendary designer, tap the link in bio. #wwdfashion #alaia #azzedinealaia
Azzedine Alaïa's “I-did-it-my-way” ethos stood out starkly at a time when brands are experimenting with consumer-facing fashion shows, coed formats and trans-seasonal collections – anything to perk up lackluster sales of ready-to-wear in an age of Insta-everything. “It’s not creation anymore. This becomes a purely industrial approach,” the late designer told WWD in an interview last year. “But anyway, the rhythm of collections is so stupid. It’s unsustainable. There are too many collections.” Read more about the iconic designer’s life and work on wwd.com, link in bio. #wwdfashion #azzedinealaia (📷: @WWD Archive, 1986) #alaia
Sneaker reselling app @goat’s latest exhibit, "The Greatest: New York," tells the story of New York's sneaker culture. To celebrate the exhibit, an intimate crowd gathered on Thursday night at the pop-up gallery space, located at Platform in Culver City, to hear guest speaker and illustrator @esymai talk about her own rise in streetwear and women in the business. "For me I'm just someone who is creative. I like to create things," said Chang. #wwdfashion
Azzedine Alaïa, one of the most iconic couturiers of the modern era whose body-con designs defined Eighties fashion, has died in Paris. The diminutive Tunisian-born designer, known for his structured knitted dresses with fitted waists and impeccably cut, figure-hugging second skin silhouettes was deeply admired by his peers, and counted supermodel Naomi Campbell - his adoptive daughter - among his inner circle, one of a gang of glamazons including Farida Khelfa, Carla Bruni and Stephanie Seymour who became ambassadors of his style. (📷: Alexandre Guirkinger) #wwdblast