Men's Wearhouse on Wednesday rejected an unsolicited $2.3 billion offer from men's retailer Jos. A. Bank.
In the now-public September letter, Jos. A. Banks chairman Robert Wildrick wrote that "by combining our two companies, we can together create the best men’s apparel and sportswear designer, manufacturer and retailer in the U.S."
Men's Wearhouse issued a statement Wednesday saying the offer undervalues the company, and Bill Sechrest, Lead Director of the Board, called the proposal opportunistic and subject to "unacceptable risks and contingencies."
"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," the statement said.
In addition, Men's Wearhouse said such a merger could raise antitrust concerns. CEO Doug Ewert meanwhile outlined his company's plans for growth.
Ewert said Men's Wearhouse has taken "number of strategic initiatives to accelerate growth and profitability, including our recent acquisition of JA Holding Inc. and the Joseph Abboud brand."
"We believe we are well positioned to deliver compelling value to our shareholders," Ewert said.
The offer from Jos. A. Banks came a few months after Men's Wearhouse issued an abrupt June statement saying it was firing founder George Zimmer as executive chairman, later accusing him of being "power hungry."
Following the rejection of the Jos. A. Banks proposal, Men’s Wearhouse was trading more than 20 percent higher than its Tuesday closing price in pre-market activity and opened at $43.41 per share. Jos. A. Banks was up 5.3 percent At start of trading Wednesday, though investors may yet penalize either company.