Men’s Wearhouse rejects Jos. A. Bank offer, adopts rights plan

Fremont, Calif. – The Men’s Wearhouse has rejected the unsolicited proposal by Jos. A. Bank to acquire the company for $48 per share, or about $2.3 billion.

Men’s Wearhouse said in a press release that the offer significantly undervalues the company, is inadequate and not in the best interests of the company or its shareholders.

“After careful review and deliberation, our board of directors has determined that Jos. A. Bank's proposal significantly undervalues Men's Wearhouse and fails to reflect the company's growth strategy and upside potential," said Bill Sechrest, lead director of the board. "We believe Jos. A. Bank's unsolicited proposal is opportunistic, subject to unacceptable risks and contingencies, and would deprive our shareholders of the value inherent in Men's Wearhouse for inadequate consideration."

The rejection sets the stage for a potential battle between two of the nation’s largest menswear retailers. Men’s Wearhouse has 1,137 stores, while Jos.A. Bank operates some 624 stores.

Men’s Wearhouse has also adopted a limited duration shareholder rights plan and declared a dividend of one right on each share of the company's common stock. The rights generally will become exercisable and allow holders to acquire the company's common stock at a discounted price if a person or group acquires beneficial ownership of 10% or more of Men's Wearhouse common stock (15% in the case of a passive institutional investor) in a transaction not approved by the board of directors.

The rights plan expires on September 30, 2014 unless earlier redeemed, exchanged or terminated by the company. Men’s Wearhouse said the plan is not designed to prevent another buyout offer its board considers favorable.

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