Why has The Men’s Wearhouse, Inc (NYSE:MW) refused Jos. A. Bank Clothiers’ bid?
Jos. A. Bank Clothiers had put forth a $2.3B or $48/share bid to acquire The Men’s Wearhouse, Inc (NYSE:MW). The latter has rejected the bid as they feel the offer undervalues the company which is a much larger company than the bidding company.
Jos. A. Bank Clothiers said that the merger would create a combination of these 2 national brands and form a $3.5B retailing giant with a combined 1,700 stores. It has 602 stores while The Men’s Wearhouse, Inc (NYSE:MW) operates 1.143 stores.
In a statement, the lead director for The Men’s Wearhouse, Inc (NYSE:MW) said that is offer does not reflect their growth strategy as well as the upside potential. He also said that are certain potential risks which are not acceptable. Jos. A. Bank Clothiers is seeking to boost its stock value and growth and has been scouting for acquisitions and had put in the bid on 17 September. The Men’s Wearhouse, Inc (NYSE:MW) had been in the process of reviewing this proposal that the bidding company said was an indication of interest and a non-binding proposal. Any merger will require the approval of the Jos. A. Bank Clothiers board members as well.
In Wednesday’s trading, The Men’s Wearhouse, Inc (NYSE:MW) rose by 27.78%. The opening price of the shares was $43.90, which climbed to an intraday high of $45.56 and dipped to a close of $45.03. Approximately 15.80 million shares were traded on Wednesday while an average volume of 0.783 million shares were traded over a 30 day period. The 52-week low of The Men’s Wearhouse, Inc (NYSE:MW) shares is $27.42 and its 52-week high is $45.56. The company has a market capitalization of $2.15 billion. Jos. A. Bank Clothiers is a specialty-retailer of men’s suits. It is also a provider of tuxedo rental-product in the U.S and Canada.