Jos. A Bank has pulled back from attempting to buyout struggling Men's Wearhouse for $2.3 billion The New York Times reported Friday.
"The MW board has denied our request for limited due diligence and has failed to engage in any discussions whatsoever regarding our proposal," Robert Wildrick, Jos. A. Bank's chairman, said in a letter to Douglas Ewert, chief executive of Men's Wearhouse The Times reported. "We are therefore terminating our proposal in order to consider other strategic alternatives which we have been investigating."
Eminence Capital, Men's Wearhouse's largest contributor will now meet with the company's shareholders to discuss the next steps. These could include a revamp of bylaws to allow other contributors to eliminate directors without giving a reason.
According to The Times, Jos A. Bank suggested the idea in September for $48 a share. Men's Wearhouse halted talks however, and chose not to proceed with the offer because they felt it was not realistic. Men's Wearhouse therefore attempted to revive itself by increasing sales a maximum $550 million in three years.
The Men's Wearhouse board claims the bid underestimated the company's worth and did not take the shareholders best interests into account The Times reported.
"The board and management team are confident that continuing our strategic plan will create more value for shareholders than Jos. A. Bank's inadequate, highly conditional proposal," Ewert told The Times in a statement.
Men's Wearhouse rejected Jos. A. Bank's initial $2.3 billion bid to take over the struggling retailer last month.
Men's Wearhouse said it had twice as many stores as Jos. A Bank, and experienced 13 consecutive quarters of growth in same store sales through its main locations, while Jos A. Bank's revenue decreased three consecutive quarters.
Jos A. Bank introduced the idea to merge with its competitor three months after Men's Wearhouse let its founder and chairman George Zimmer go following a power struggle over privatizing the company.
