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Hampstead, Md. – Jos. A. Bank Clothiers Inc. has officially rejected Men’s Wearhouse’s latest $1.78 billion buyout offer. But in yet another twist to the long-running saga between the two companies, in open letter to Men’s Wearhouse president and CEO Douglas S. Ewert, Jos. A. Bank said it is willing to meet with its rival.
In the letter, Jos. A. Bank said that although it believes purchasing Eddie Bauer will create real value for shareholders and it is proceeding with the purchase of Eddie Bauer parent company Everest Holdings LLC, because Men’s Wearhouse has said it would consider raising its offer, Jos. A. Bank will meet with the retailer to see what its highest offer is. Jos. A. Bank said it would also discuss issues such as providing limited due diligence and determining structure and certainty of a transaction.
Reports have indicated that Goldman Sachs, sole underwriter of the $400 million bridge loan supporting the Eddie Bauer purchase, has put financing the loan on hold. However, the letter states that Goldman Sachs remains fully committed to providing financing.
In addition, Jos. A. Bank announced that the Federal Trade Commission has granted early termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 with respect to the pending transaction between Jos. A. Bank and Golden Gate Capital, under which Jos. A. Bank will acquire Everest Holdings. The Eddie Bauer deal is structured so that Jos. A. Bank can exit the deal if a more favorable transaction becomes available before it is completed.
“Please be advised that, notwithstanding 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,” said the letter, signed by Jos. A. Bank chairman Robert N. Wildrick.
In a public response, Men’s Wearhouse said a purchase of Jos. A. Bank has the “strategic logic and the potential to deliver substantial benefits to our respective shareholders, employees and customers.” A letter signed by Ewert said Men’s Wearhouse is willing to discuss due diligence, structure and certainty of the deal, and will have its advisors get in touch with Jos. A. Bank to set up meetings.
“We look forward to working collaboratively with the Jos. A. Bank Board and management to effect this combination which would provide your shareholders with a substantial premium and immediate value,” said the letter.