Increase Contingent Upon Results of
Limited Due Diligence
If Men's Wearhouse Board Continues Its
Refusal to Engage in Good Faith Discussions With Jos. A. Bank, the
Proposal Terminates on November 14th
Jos. A. Bank Clothiers, Inc. (Nasdaq:JOSB) today sent the following
letter to the Chief Executive Officer of The Men's Wearhouse, Inc.
(NYSE:MW). It states that Jos. A. Bank is willing to consider
raising the acquisition price it proposed to Men's Wearhouse on
September 18, 2013 of $48 per share, or a 42% premium to the
closing price of Men's Wearhouse common stock on the day prior, if
Jos. A. Bank is given the opportunity to conduct limited due
diligence in order to determine that such an increase would be
justified. Jos. A. Bank notes that it believes its September
18th proposal represents superior, immediate value for the
shareholders of Men's Wearhouse when compared to the uncertain
discounted present value of the long-term plan issued by Men's
Wearhouse earlier this week.
The letter finally states that, to date, despite the proposed
premium and the strong, positive reaction to it in the market, the
Board of Directors of Men's Wearhouse has refused to discuss the
proposal with Jos. A. Bank. If the Men's Wearhouse Board continues
this stance and has not engaged in good faith discussions with Jos.
A. Bank by Thursday, November 14, 2013, Jos. A. Bank will terminate
its proposal. Full text of the letter can be found below.
October 31, 2013
Mr. Douglas S. Ewert, Chief Executive Officer The
Men's Wearhouse, Inc. 6100 Stevenson Boulevard Freemont, California
94538
Dear Doug:
On September 18, 2013, Jos. A. Bank made a
confidential, non-binding proposal to acquire all of the
outstanding shares of Men's Wearhouse for $48 per share in cash,
representing a premium-to-market of over 40% based on the closing
price of Men's Wearhouse's shares the day before we made our
proposal. On October 9, 2013, following an unfortunate news
leak (which did not originate from us) describing our proposal, we
were forced to make our offer public. Your board rejected our
proposal saying that it significantly undervalued Men's Wearhouse
and since then has made no effort to engage in any discussions with
us on behalf of your shareholders. This letter is to inform
you that Jos. A. Bank is willing to consider raising our proposed
acquisition price if we are given the opportunity to conduct
limited due diligence in order to determine that such an increase
would be justified.
Our evaluation of Men's Wearhouse was necessarily
based solely on publicly available information. We believe that if
we were provided with access to a limited amount of non-public
information we could promptly determine whether we could increase
our proposed acquisition price. We are, of course, prepared to
execute a mutually acceptable non-disclosure agreement to provide
Men's Wearhouse with the assurance that any information provided
will be kept confidential.
Several days ago, you published an investor update
comparing our proposed transaction against your financial and
operating plans for Men's Wearhouse as an independent public
company. You went to great lengths to disparage Jos. A. Bank,
pointing out the relative size of the companies (yes, we are
smaller), suggesting our proposal was opportunistic (yes, we agree
it is a great opportunity), and suggesting that our financing is
not credible (we can't imagine how it could be more credible at
this stage of the process given the quality of our partners). We
believe that your shareholders would be best served by your
providing us with a limited amount of non-public information so
that we can advise you whether we can improve our price. You can
then responsibly compare your standalone prospects with the value
of our revised proposal. Before you foreclose our offer from your
investors, we would hope and expect that you would evaluate in an
informed manner the alternatives to create shareholder value. While
we believe strongly that our $48 per share cash proposal represents
superior, immediate value for the shareholders of Men's Wearhouse
when compared to the uncertain discounted present value of your
long-term plan, we are nevertheless prepared to consider a price
increase.
The increase in the value of Men's Wearhouse shares
since our proposal became public makes it obvious that the
shareholders of Men's Wearhouse strongly support our transaction.
In fact, the market believes that this combination creates over
$900 million of value (based on the proposed price for Men's
Wearhouse shares and yesterday's closing price for Jos. A. Bank
shares compared to the closing price of both stocks on the date
prior to our proposal). Despite the market premium generated by our
proposal, your board has refused to discuss the proposal with
us. Under the circumstances, there is no reason for this
process to drag on. If your board has not engaged in good
faith discussions with us by November 14, 2013, we will terminate
our proposal in order to consider other strategic alternatives
which we have been investigating.
I hope you will agree to engage with us in a
thoughtful and responsible dialog.
Sincerely,
Robert N. Wildrick, Chairman of the Board Jos. A.
Bank Clothiers, Inc.
This letter and our proposal constitute a preliminary,
non-binding indication of interest to acquire the outstanding
shares of Men's Wearhouse, and our proposal is being submitted
based on the understanding that it is not an offer that is capable
of being accepted and that there will be no binding agreement
between us or any commitment or obligation on either party with
respect to the proposal or a possible transaction unless and until
a definitive agreement is executed by Men's Wearhouse and Jos. A.
Bank. We reserve the right to discontinue discussions regarding,
and withdraw, our proposal at any time. Our proposal is subject to
a number of conditions, including, among other things, our
satisfaction with the results of due diligence in our sole
discretion, the negotiation and execution of a mutually
satisfactory definitive agreement, the negotiation and execution of
satisfactory definitive equity and debt financing agreements and
the approval of a transaction by our Board of Directors.
About Jos. A. Bank
Jos. A. Bank Clothiers, Inc., established in 1905, is one of the
nation's leading designers, manufacturers and retailers of men's
classically-styled tailored and casual clothing, sportswear,
footwear and accessories. The Company sells its full product line
through 628 stores in 44 states and the District of Columbia, a
nationwide catalog and an e-commerce website that can be accessed
at www.josbank.com. The Company is headquartered in Hampstead, MD,
and its common stock is listed on the NASDAQ Global Select Market
under the symbol "JOSB."
Cautionary Note on Forward-Looking
Statements
This press release contains forward-looking statements and
information about our current and future prospects and our
operations and financial results, which are based on currently
available information. The forward looking statements include
assumptions about our operations, such as cost controls, market
conditions, liquidity and financial condition. These statements
also include assumptions about our proposed acquisition of The
Men's Wearhouse, Inc. ("Men's Wearhouse") through a merger
(including its benefits, results, effects and timing) that may not
be realized. Risks and uncertainties that may affect our business
or future financial results include, among others, risks associated
with the economy, weather, public health and other factors
affecting consumer spending (including negative changes to consumer
confidence and other recessionary pressures), higher energy and
security costs, the successful implementation of our growth
strategy (including our ability to finance our expansion plans),
the mix and pricing of goods sold, the effectiveness and
profitability of new concepts, the market price of key raw
materials (such as wool and cotton), seasonality, merchandise
trends and changing consumer preferences, the effectiveness of our
marketing programs (including compliance with relevant legal
requirements), the availability of suitable lease sites for new
stores, doing business on an international basis, the ability to
source product from our global supplier base, legal and regulatory
matters and other competitive factors. Risks and uncertainties
related to the proposed transaction include, among others: the risk
that Men's Wearhouse's stockholders do not approve the transaction;
potential adverse reactions or changes to business relationships
resulting from the announcement or completion of the transaction;
uncertainties as to the timing of the transaction; competitive
responses to the proposed transaction; the risk that regulatory or
other approvals required for the transaction are not obtained or
are obtained subject to conditions that are not anticipated; the
risk that the other conditions to the closing of the transaction,
which include, among others, negotiation and execution of a
mutually satisfactory merger agreement, approval by each company's
board of directors, and negotiating and entering into satisfactory
definitive equity and debt financing agreements, are not satisfied;
costs and difficulties related to the integration of Men's
Wearhouse's businesses and operations with Jos. A. Bank's business
and operations; the inability to obtain, or delays in obtaining,
cost savings and synergies from the transaction; unexpected costs,
charges or expenses resulting from the transaction; litigation
relating to the transaction; the inability to retain key personnel;
and any changes in general economic and/or industry specific
conditions. Additional factors that could cause future results or
events to differ from those we expect are those risks discussed
under Item 1A, "Risk Factors," in Jos. A. Bank's Annual Report on
Form 10-K for the fiscal year ended February 2, 2013, Jos. A.
Bank's Quarterly Report on Form 10-Q for the quarter ended May 4,
2013, Jos. A. Bank's Quarterly Report on Form 10-Q for the quarter
ended August 3, 2013, Men's Wearhouse's Annual Report on Form 10-K
for the fiscal year ended February 2, 2013, Men's Wearhouse's
Quarterly Report on Form 10-Q for the quarter ended August 3, 2013,
and other reports filed by Jos. A. Bank and Men's Wearhouse with
the Securities and Exchange Commission (SEC). Please read the "Risk
Factors" and other cautionary statements contained in these
filings. We undertake no obligation to update or revise any
forward-looking statements, whether as a result of new information,
the occurrence of certain events or otherwise. As a result of these
risks and others, actual results could vary significantly from
those anticipated in this press release, and our financial
condition and results of operations could be materially adversely
affected.
Additional Information
This communication does not constitute an offer to sell or the
solicitation of an offer to buy any securities or a solicitation of
any vote, proxy or approval. No tender offer for the shares of
Men's Wearhouse has been made at this time.
CONTACT: For Jos. A. Bank - Media:
Thomas Davies/Molly Morse
Kekst and Company
212-521-4873/212-521-4826
thomas-davies@kekst.com
molly-morse@kekst.com
For Jos. A. Bank - Investment Community:
David E. Ullman
EVP/CFO
410-239-5715
For Golden Gate Capital (which, as previously announced,
plans to provide $250 million new equity capital to Jos. A.
Bank in support of the acquisition of Men's Wearhouse):
Denise DesChenes/Nathaniel Garnick
Sard Verbinnen & Co.
212-687-8080
Jenny Gore
415-618-8750
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