That was the attitude taken by Jos. A. Bank Clothiers Inc. on Thursday when it nixed the latest bid by The Men’s Wearhouse Inc., but said it is willing to open discussions as long as the talks are on its terms.
In a letter sent to Men’s Wearhouse chief executive officer Douglas S. Ewert on Thursday, Jos. A. Bank chairman Robert N. Wildrick said the board has rejected the revised tender offer of $63.50 a share on the grounds that it is “inadequate.” He said the board met twice to review the offer and that the review is ongoing.
More importantly, this time the Jos. A. Bank board has approved a meeting with Men’s Wearhouse to “establish a process” for further talks about its rival’s offer.
Wildrick set forth some issues that Jos. A. Bank wanted to discuss in the future meeting, such as the “precise scope” of due diligence, how the proposed transaction will be structured, the certainty of closing a deal, and what is Men’s Wearhouse’s final and best offer.
This time the letter to Ewert included a confidentiality agreement in connection with Men’s Wearhouse’s due diligence request.
Wildrick also lit a fire under Ewert’s chair, noting that, “Time is of essence, and we would like to understand your ability to proceed quickly with your proposal.”
Wildrick cautioned, “[N]otwithstanding 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.”
He left Ewert with one bit of good news for shareholders of both Jos. A. Bank and Men’s Wearhouse: “I have instructed our advisers to contact your advisers.”
Gilbert Harrison, chairman of Financo, one of Jos. A. Bank’s financial advisers, said, “Under either transaction, whether it be Men’s Wearhouse or Eddie Bauer, the board of Jos. A. Bank would have created enormous value for its shareholders. The board’s only focus, which has been difficult, has been in making the right decision for the shareholders on which path to take.
“What people have neglected to realize is that in 1999, when Bob Wildrick and the current management team came in, the company was worth less than $20 million. Today it is worth 100 times that amount. It has no debt on its balance sheet and more than $400 million of cash in the bank. And more than that, 5,000 new jobs have been created since 1999 as a result of the growth of the company,” the banker said.
Should Jos. A. Bank go ahead with plans to acquire Eddie Bauer, it will have to carry debt on its balance sheet. Sources said that there would be cash flow from the core Jos. A. Bank operation to fund additional acquisitions down the road.
One criticism regarding the Eddie Bauer transaction is that it centers on value creation for shareholders later on, presuming the turnaround at Bauer takes hold and the perceived momentum continues. In contrast, analysts and some investors such as hedge fund Eminence Capital prefer the offer from Men’s Wearhouse, because shareholder value is created immediately. Eminence holds a 9.9 percent stake in Men’s Wearhouse and a 4.9 percent stake in Jos. A. Bank.
Executives at Men’s Wearhouse could not be reached for comment by press time. Executives at Golden Gate Capital, which owns Eddie Bauer, declined comment.
Men’s Wearhouse on Monday raised its cash tender offer to $63.50 a share, or a total value of $1.78 billion, from $57.50, or $1.61 billion. It also said it was prepared to boost its bid to $65 a share, valuing a deal at $1.8 billion, if Jos. A. Bank agreed to end its agreement to acquire Eddie Bauer.
Earlier this month, Jos. A. Bank inked a deal with Golden Gate Capital to acquire Eddie Bauer in a cash-and-stock deal valued at $825 million.
The disclosure of Wildrick’s letter to Ewert came after the markets closed. Shares of Jos. A. Bank rose 0.6 percent to close at $60.30 in Nasdaq trading and Men’s Wearhouse rose 1.5 percent to $50.42 in New York Stock Exchange trading.
EXCLUSIVE: Two and half months after John Targon, cofounder and codesigner of Baja East, was hired as creative director of the contemporary division at Marc Jacobs, he has left the company, WWD has learned. Marc Jacobs International, which is owned by LVMH Moët Hennessy Louis Vuitton, confirmed Targon’s departure in a statement: “John Targon is a talented designer and we appreciate the work he has done here. Ultimately working together did not make sense for the brand and we wish him the best.” Read the story by @jessiredale, link in bio. #wwdnews
@theluxurycollection is officially launching a collection, tapping Sofia Sanchez de Betak for the capsule. Over 30 styles will be featured in the Chufy x The Luxury Collection, debuting next month at Bergdorf Goodman, The Webster, FiveStory and more. De Betak, known as “@chufy,” drew inspiration for the collection from her trips to Japan in the past year #wwdfashion
@lhd, founder and CEO of @thewebster, has teamed up with @lebonmarcherivegauche for the European launch of her ready-to-wear line, LHD. The launch will come with an exclusive pop-up opening today that’s set to run through May 20. Located on the second floor, it carries her debut Miami-themed resort collection, launched in November as see-now-buy-now. #wwdfashion
@longchamp, which marks its 70th anniversary this year, just opened its biggest U.S. store on Manhattan’s Fifth Avenue. On the lower level there’s a floor-to-ceiling display of the brand’s iconic Le Pliage bag – in all of its different colors, shapes and sizes. Customers can also have their product personalized in-store by imprinting names, initials or emblems. #wwdfashion (📷: @ericmtownsend)
“Whenever I’m in that place of sound and music, I don’t have fear or nervousness…This album has a lot of themes of courage and boldness and I want to be the soundtrack for people’s lives. I’ll be so happy if [my songs] evoke strength in people, which I know music has done for me,” says @kimbramusic of her newest album “Primal Heart.” The New Zealand-born singer sat down with WWD to talk about her music, newest tour and connecting with hear fans — read more on WWD.com #wwdeye (📷: @jilliansollazzo)
Luxury handbag resale company @rebagofficial is planning to sell a rare collectible for $70,000: the @hermes White Crocodile Himalayan Birkin. The exclusive Birkin sold for about $100,000 in 2008, when @davidbeckham bought one for his wife @victoriabeckham to add to her collection. Read more about the rare Birkin on WWD.com #wwdaccessories
With her costume pearl necklace and what-you-see-is-what-you-get style, Barbara Bush, who died Tuesday at age 92, was a straight-shooter from start to finish.
Born Barbara Pierce in New York City, Bush served as the 37th first lady, as well as the country’s second lady from 1981 to 1989. In addition to being part of the longest presidential marriage — 73 years — Bush also had the unlikely distinction of having one son, George W., become the 43rd president and another son, Jeb, run unsuccessfully in 2016. Having served as second lady during the Reagan administration’s two terms and lived all over the world during her own husband’s ascending political career, Barbara Bush made it clear that literacy — not fashion — was her priority. Read more from Rosemary Feitelberg’s obituary on the late First Lady in WWD.com, link in bio. #barbarabush #wwdnews
Western and ’90s trends have influenced denim for fall 2018. Think raw, dark and coated jeans mixed with bold prints and tough leather. #trendtuesdays #wwdfashion (Styled by @thealexbadia;📷: @ryanplett)