Determines Men's Wearhouse Offer
Substantially Undervalues Jos. A. Bank
Urges Stockholders Not to Tender
Shares
Jos. A. Bank Clothiers, Inc. (Nasdaq:JOSB) (the "Company" or "Jos.
A. Bank") today announced that its Board of Directors (the
"Board"), after careful consideration and discussions with its
financial and legal advisors, determined that the unsolicited,
highly conditional tender offer from The Men's Wearhouse, Inc.
(NYSE:MW) ("Men's Wearhouse") to acquire all outstanding common
shares of the Company at a price of $57.50 per share in cash (the
"Offer") is inadequate from a financial point of view and not in
the best interest of Jos. A. Bank's stockholders. Accordingly, the
Board recommends that Jos. A. Bank's stockholders reject the Offer
and not tender their shares into the Offer.
The reasons for the Board's recommendation are set forth in a
Schedule 14D-9 being filed by the Company today with the Securities
and Exchange Commission ("SEC"), which is also being disseminated
to stockholders.
Robert N. Wildrick, Chairman of Jos. A. Bank, said, "Our Board
of Directors firmly believes that the Men's Wearhouse offer is
inadequate and significantly undervalues Jos. A. Bank and its near-
and long-term potential."
He continued, "Our Board and the Company's management team are
committed to acting in the best interests of all of our
stockholders, and continuing to deliver value for them. For well
over a decade, Jos. A. Bank has been among the leaders in the
industry in driving exceptionally strong revenue and net income
growth. At this time, the Company has a well-developed strategy in
place to continue to increase revenue, substantially improve
margins and deliver enhanced returns to stockholders. The Jos. A.
Bank Board strongly urges stockholders to reject the Offer and not
tender their shares."
In reaching the conclusions and in making the recommendation
described above, the Board considered numerous factors, including
but not limited to the following:
The Offer is Inadequate and Opportunistic
- The Offer significantly undervalues Jos. A. Bank, and
its future prospects. The Board has determined that the
Offer does not reflect the value inherent in the Company's future
prospects and its track record in creating stockholder value. The
Board is confident that the Company's stand-alone plan will deliver
greater value to its stockholders than would be obtained under the
Offer.
- The Company has received an inadequacy opinion from its
financial advisor. Goldman, Sachs & Co. ("Goldman
Sachs"), financial advisor to the Company, rendered an opinion to
the Board that as of January 17, 2014, and based upon and subject
to the factors and assumptions set forth in the written opinion,
the consideration proposed to be paid to the holders (other than
the Offeror and any of its affiliates) of the Company's shares
pursuant to the offer was inadequate from a financial point of view
to such holders. The full text of the written opinion of Goldman
Sachs, dated January 17, 2014, which sets forth the assumptions
made, procedures followed, matters considered and limitations on
the review undertaken in connection with such opinion, is attached
to the Company's 14D-9 filing as Annex A. Goldman Sachs provided
its opinion for the information and assistance of the Company's
Board in connection with its consideration of the Offer, and it is
not a recommendation as to whether or not any holder of the
Company's shares should tender such shares in connection with the
Offer or any other matter.
- The Offer is opportunistic and does not reflect the
Company's improving financial
performance, as reflected in recent quarters. The Offer is
opportunistic and timed to acquire the Company while the Company's
operations are strengthening. The Offer does not reflect the
significant progress the Company has made in recent quarters and
its improved financial performance and results of operations.
- The Offer does not properly reflect the Company's
strategy and future prospects – based on Jos. A. Bank's track
record of industry-leading performance. The Board believes
that implementation of the Company's stand-alone plan will generate
greater value for stockholders than the Offer price, with support
from the Company's performance history. For example, from January
3, 2000 through January 3, 2014, the Company has generated
approximately 5,786% total share price growth (compared to only
170% at Men's Wearhouse).
- The Offer fails to appropriately compensate the
Company's stockholders for the
significant synergies that Men's
Wearhouse claims would be created by a business combination between
the two companies. Men's Wearhouse has publicly disclosed
its estimate that a combination of the companies could yield $100 -
$150 million of run rate synergies to be realized in the first
three years. If this estimate is accurate, the Offer does not come
close to adequately compensating the Company's stockholders for
this purported significant synergy value.
- Jos. A. Bank is exploring strategic acquisitions and
other alternatives. As the Company has stated publicly,
Jos. A. Bank is continuing to consider strategic alternatives,
including acquisitions, which will maximize stockholder value. The
Board believes that its and management's deep industry experience,
core competencies and track record enable it to identify and
execute acquisition transactions that will create value in excess
of the Offer price.
Men's Wearhouse's Intentions are Unclear; Its Commitment
is Not Credible
- Men's Wearhouse's true motives are unclear and its
commitment to the Offer is not credible. When Men's
Wearhouse rejected the Company's initial proposal to combine the
two companies, it listed a litany of reasons, including stating
that the combination of the two companies "[r]aises significant
antitrust concerns." Men's Wearhouse only then made its proposal to
combine the two companies through its acquisition Offer after its
largest shareholder, Eminence Capital, LLC ("Eminence"), threatened
the Board of Men's Wearhouse that, unless it pursued a combination
with the Company, Eminence would seek, through a proxy
solicitation, to call a special meeting of shareholders to, among
other things, amend Men's Wearhouse's bylaws to permit the removal
of its entire Board of Directors. After Men's Wearhouse made its
offer to acquire the Company, Eminence then terminated its proxy
solicitation threatening the removal of the Men's Wearhouse Board.
- The Offer's
conditions create significant uncertainty and risk. The
Offer is subject to 16 broadly drafted conditions, with numerous
subparts, some of which are of questionable relevance to the
Company and its business. Moreover, many of these conditions may be
asserted by Men's Wearhouse in its sole discretion to terminate the
Offer.
- The Offer is highly uncertain and any payments made to
Company stockholders could be considerably deferred. Men's
Wearhouse has stated that it may, subject to any applicable rules
and regulations of the Securities and Exchange Commission, extend
the Offer from time to time for any reason. The Company's
stockholders have no assurance that they will ever receive payment
for shares tendered in a timely fashion.
The Company's 14D-9 filing is available on the SEC's website,
www.sec.gov, and in the "Company Information" section of the
Company's website at www.josbank.com, or through the following web
address:
http://phx.corporate-ir.net/phoenix.zhtml?c=113815&p=irol-IRHome.
Goldman, Sachs & Co. and Financo, LLC are serving as
financial advisors to the Company; Skadden, Arps, Slate, Meagher
& Flom LLP and Guilfoil Petzall & Shoemake, L.L.C. are
serving as legal advisors to the Company and Innisfree M&A
Incorporated is serving as proxy solicitor.
Company Rights Plan
At its meeting on January 17, 2014, the Board took action, as
permitted by the Rights Agreement dated as of September 6, 2007,
between the Company and Continental Stock Transfer & Trust
Company, as rights agent (as amended, the "Rights Agreement") to
postpone the Distribution Date (as defined in the Rights
Agreement), which otherwise would occur on the tenth business day
after the date of commencement of the Offer, until such date as may
be subsequently determined by the Board by resolution. A copy of
the original Rights Agreement and the First Amendment to the
original Rights Agreement have been filed with the SEC as Exhibit
4.1 to the Company's Current Report on Form 8-K filed September 7,
2007 and Exhibit 4.1 to the Company's Current Report on Form 8-K
filed on January 6, 2014, respectively.
About Jos. A. Bank
Jos. A. Bank Clothiers, Inc., established in 1905, is one of the
nation's leading designers, manufacturers and retailers of men's
classically-styled tailored and casual clothing, sportswear,
footwear and accessories. The Company sells its full product line
through 628 stores in 44 states and the District of Columbia, a
nationwide catalog and an e-commerce website that can be accessed
at www.josbank.com. The Company is headquartered in Hampstead, MD,
and its common stock is listed on the NASDAQ under the symbol
"JOSB."
CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS This
communication contains forward-looking statements that are based on
currently available information and current expectations, estimates
and projections about Jos. A. Bank Clothiers, Inc.'s business. The
forward looking statements include assumptions about our
operations, such as cost controls, market conditions, liquidity and
financial condition. Risks and uncertainties that may affect
our business or future financial results include, among others,
risks associated with domestic and international economic activity,
weather, public health and other factors affecting consumer
spending (including negative changes to consumer confidence and
other recessionary pressures), higher energy and security costs,
the successful implementation of our growth strategy (including our
ability to finance our expansion plans), the mix and pricing of
goods sold, the effectiveness and profitability of new concepts,
the market price of key raw materials (such as wool and cotton) and
other production inputs (such as labor costs), seasonality,
merchandise trends and changing consumer preferences, the
effectiveness of our marketing programs (including compliance with
relevant legal requirements), the availability of suitable lease
sites for new stores, doing business on an international basis, the
ability to source product from our global supplier base, legal and
regulatory matters and other competitive factors. Additional
factors that could cause future results or events to differ from
those we expect are those risks discussed under Item 1A, "Risk
Factors," in Jos. A. Bank's Annual Report on Form 10-K for the
fiscal year ended February 2, 2013, Jos. A. Bank's Quarterly Report
on Form 10-Q for the quarter ended May 4, 2013, Jos. A. Bank's
Quarterly Report on Form 10-Q for the quarter ended August 3, 2013,
Jos. A. Bank's Quarterly Report on Form 10-Q for the quarter ended
November 2, 2013, and other reports filed by Jos. A. Bank with the
Securities and Exchange Commission (SEC). Please read the
"Risk Factors" and other cautionary statements contained in these
filings. We undertake no obligation to update or revise any
forward-looking statements, whether as a result of new information,
the occurrence of certain events or otherwise. As a result of
these risks and others, actual results could vary significantly
from those anticipated in this release, and our financial condition
and results of operations could be materially adversely
affected.
IMPORTANT INFORMATION FOR INVESTORS AND STOCKHOLDERS
This communication does not constitute an offer to buy or
solicitation of an offer to sell any securities. In response to the
tender offer for the shares of the Company commenced by The Men's
Wearhouse, Inc. and Java Corp., the Company has filed a
solicitation/recommendation statement on Schedule 14D-9 with the
U.S. Securities and Exchange Commission ("SEC"). Any
solicitation/recommendation statement filed by the Company that is
required to be mailed to stockholders will be mailed to
stockholders of the Company. INVESTORS AND STOCKHOLDERS OF THE
COMPANY ARE URGED TO READ THE SOLICITATION / RECOMMENDATION
STATEMENT AND OTHER DOCUMENTS FILED WITH THE SEC CAREFULLY IN THEIR
ENTIRETY BECAUSE THEY WILL CONTAIN IMPORTANT
INFORMATION. Investors and stockholders may obtain free copies
of the solicitation/recommendation statement and other documents
(when available) filed with the SEC by the Company free of charge
through the website maintained by the SEC at www.sec.gov. In
addition, the solicitation/recommendation statement and other
materials related to Men's Wearhouse's unsolicited proposal may be
obtained from the Company free of charge by directing a request to
the Company's Investor Relations Department, Jos. A. Bank
Clothiers, Inc., 500 Hanover Pike, Hampstead, MD 21074,
410.239.5900.
CONTACT: For Jos. A. Bank - Media:
Thomas Davies/Molly Morse
Kekst and Company
212-521-4800
thomas-davies@kekst.com
molly-morse@kekst.com
For Jos. A. Bank - Investment Community:
David E. Ullman
EVP/CFO
410-239-5900
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