Jos. A. Bank Rejects Men's Wearhouse $1.54 Billion Offer (1)
Bloomberg News
rejected a $1.54 billion takeover proposal from as too low. The shares remained above the offer price, indicating investors expect a higher bid.
The Men's Wearhouse offer 'significantly undervalued' the company and wasn't in shareholders' best interest, Hampstead, Maryland-based Jos. A. Bank said today in a statement. The company said it would continue to seek its own acquisitions to boost shareholder value.
Jos. A. Bank's rejection of the offer represents another turn in a takeover battle that it started in October with a $2.3 billion bid for Men's Wearhouse. The target rejected that offer and later made its own proposal for Jos. A. Bank. Shares of Jos. A. Bank have traded above Men's Wearhouse's $55-a-share offer since it made the bid on Nov. 26 and stayed higher than that price today.
'Jos. A. Bank seems to be open to a higher offer,' Mark Montagna, a Nashville, Tennessee-based analyst at Avondale Partners LLC, said in a phone interview. 'There's probably further negotiations. The top shareholders are similar at both companies, and they're going to want something to get done.'
Montagna said Jos. A. Bank may be valued at $56 to $61 a share. He has the equivalent of a hold rating on the shares.
Men's Wearhouse, based in Houston, 1.4 percent to $51.27 at 9:57 a.m. in New York. Jos. A. Bank slipped 1.7 percent to $56.94.
Ken Dennard, a spokesman for Men's Wearhouse who works for Dennard-Lascar Associates LLC, didn't immediately respond to a phone or e-mail request for comment.
Less Appealing
Jos. A. Bank may be seeking an offer of more than $60 a share, a price that may be less appealing to Men's Wearhouse, said Betty Chen, a San Francisco-based analyst at Mizuho Securities.
'It seems they may be positioning themselves for a higher offer,' Chen said in a phone interview today. 'At a certain level it does get more risky.'
She has the equivalent of a hold rating on Men's Wearhouse's shares.
Tom Davies, a spokesman for Jos. A. Bank who works for Kekst & Co., declined to comment on what price the company may seek.
To contact the reporter on this story: Lindsey Rupp in New York at lrupp2@bloomberg.net
To contact the editor responsible for this story: Robin Ajello at rajello@bloomberg.net
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