Jos. A. Bank Clothiers Inc. has taken steps to protect itself from a hostile takeover after having rejected an acquisition bid by rival Men's Wearhouse.
The board of Hampstead-based company approved an amendment to the company's shareholder rights plan that, among other things, reduces the ownership threshold to 10 percent from 20 percent of outstanding common shares, the company said Friday.
"In light of the hostile actions The Men's Wearhouse Inc. has taken and threatened to take against the company, which are not in the best interest of the company's shareholders, the board felt it was appropriate to protect the company's shareholders by leveling the playing field," the company said in a statement.
Bank's board had rejected Men's Wearhouse $1.2 billion offer on Dec. 23 as too low. The offer came after Bank first made a $2.3 billion bid for Men's Wearhouse, but walked away from the deal after being rebuffed by the rival Houston-based chain.
The amendment announced Friday means that Bank's rights agreement has the same triggering ownership threshold as that of the Men's Wearhouse rights agreement, the company said. The board would have the ability to act if a shareholder acquires 10 percent of the shares, as opposed to 20 percent.
Men's Wearhouse had adopted several defense mechanisms in October to fend off Bank, including raising the voting requirement to amend bylaws, to make it more difficult for a large shareholder to get the votes it needs to take over. The company also added a poison pill that prevents parties from individually amassing a 10 percent stake.