Men's Wearhouse (NYSE:MW) founder George Zimmer may already have gotten part of what he wanted before he was fired by the chain: serious consideration by the board over whether the retailer should be taken private.
That's not because the board, which fired Zimmer on June 19 and issued a lengthy explanation for its action on Tuesday (June 25), has had a change of heart. It's because banks and analysts have been talking up the possibility of a private equity takeover after Zimmer published his reply to the board's explanation on Wednesday (June 26).
In his "open letter," Zimmer said the board "tried to portray me as an obstinate former CEO, determined to regain absolute control by pushing a going private transaction for my own personal benefit and ego." Not true, Zimmer said, explaining that "earlier this year, concerned with the Board's response to the short term pressures of Wall Street, I encouraged the Board to at least study a broader range of strategic alternatives beyond simply selling the K&G division, including the possibility of a going private transaction."
Zimmer added, "Rather than thoughtfully evaluating the idea or even checking the market to see what value might be created through such strategic alternatives, the Board quickly and without the assistance of financial advisors simply rejected the idea, refused to even discuss the topic or permit me to collect and present to the Board any information about its possibilities and feasibility, and instead took steps to marginalize and then silence me."
That apparently set off analysts and private-equity fund managers, according to Bloomberg, which quoted several who described Men's Wearhouse as "a very attractive acquisition target for private equity"—with or without Zimmer—and "the perfect fit for a private-equity firm."
The news service said the company declined to comment on whether it has already been approached by private equity firms. But if the board really was trying to end discussion about taking the chain private, it may find it has a lot to talk about when it finally gets around to rescheduling its shareholder meeting.
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