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Jos. A. Bank Rebuffs Latest Hostile Overture

NEW YORK (The Deal) -- Independent directors at Jos. A. Bank Clothiers (JOSB) fired back at Men's Wearhouse (MW) late Sunday, saying they "see no benefit" in entering into negotiations with the hostile suitor.

Fremont, Calif.-based Men's Wearhouse on Jan. 30 sent a letter to the Jos. A. Bank directors urging them to push the company to come to the table to discuss Men's $1.61 billion bid, suggesting the company might be willing to sweeten the offer following negotiations. The suitor also implied that in refusing to negotiate Jos. A. Bank management was more concerned with preserving their own jobs rather than what was best for the company.

The Jos. A. Bank directors in response said the Jan. 30 letter made "a number of inaccurate and misleading claims" that they said "call into question the credibility" of Men's Wearhouse. The directors said Men's Wearhouse greatly understates the antitrust risks of a combination and said the proposed price is too low.

"After carefully reviewing your offer with our financial and legal advisors, we continue to believe that your offer to acquire Jos. A. Bank substantially undervalues our company and that your proposal is not in the best interests of our stockholders," company directors wrote. "Accordingly, we see no benefit in commencing negotiations with Men's Wearhouse."

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Hampstead, Md.-based Jos. A. Bank also could be considering other options, with reports indicating the company has had preliminary talks with Golden Gate Capital about acquiring men's outdoor apparel maker Eddie Bauer LLC.

The letter is the latest shot in an ongoing battle between the two men's clothing retailers. Jos. A. Bank last year offered 
$2.3 billion for its larger rival but walked away after the bid failed to spark negotiations. Men's Wearhouse returned later in the year with a bid of its own that Jos. A. Bank has called "inadequate and opportunistic."

Eddie Bauer owner Golden Gate had agreed to provide 
$250 million in equity funding to Jos. A. Bank's bid for Men's Wearhouse.

The directors in their latest salvo noted that Jos. A. Bank's actions now are similar to steps Men's Wearhouse took when Jos. A. Bank was the aggressor, pushing back at claims of inappropriate management behavior.

"Since we assume you believe your own conduct was appropriate, we have to question the credibility of the claims you are now making against us," the directors wrote. "As with your failure to explain your flip flop about antitrust, there is a lack of candor in your failure to explain why you are criticizing Jos. A. Bank for something that the Men's Wearhouse Board did as well."

The directors said that the board continues to consider all options.

Given that Men's Wearhouse's tender does not expire until March 28, coupled with the ongoing antitrust review, "our board's thoughtful process is causing Men's Wearhouse no delay whatsoever."

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