Destination XL Group, Inc. filed a preliminary proxy statement amendment (Amendment No. 5) on November 13, 2026, disclosing that the DXL Board of Directors has determined the proposed merger with FBB Holdings I, Inc. is no longer advisable and not in the best interests of DXL and its stockholders, while remaining contractually obligated to submit the issuance proposal to a shareholder vote.

Key Highlights

  • Board reversal: The DXL Board determined that the merger and transactions contemplated by the merger agreement, including the issuance proposal, "are no longer advisable and are not in the best interests of DXL and its stockholders."
  • Original merger agreement: The merger agreement with FBB Holdings I, Inc. was signed on December 11, 2025, under which FBB stockholders would own 55% and DXL stockholders would own 45% of the combined company on a fully diluted basis.
  • Bank of America commitment lapsed: Bank of America's commitments under its commitment letter expired on October 14, 2026, and Bank of America decided not to underwrite the Combined ABL Facility.
  • Replacement financing: On November [date not specified] 2026, DXL entered into a commitment letter with 1903P Loan Agent LLC, an affiliate of Gordon Brothers, for a $165 million senior secured asset-based revolving credit facility, described as "materially less favorable" than the Bank of America terms, including significant prepayment penalties.
  • Reverse stock split proposed: Stockholders will be asked to vote on a reverse stock split at a ratio of not less than 1-for-2 and not more than 1-for-30.
  • Incentive plan amendment: Proposal 3A would increase shares available under the 2016 Incentive Compensation Plan by 13,500,000 shares; Proposal 3B would increase by 7,800,000 shares, depending on prior annual meeting outcomes.
  • Annual meeting scheduled: DXL's 2026 annual meeting of stockholders is scheduled for December 17, 2026.

DXL Board Cites FBB Deterioration and Financing Concerns in Merger Assessment

According to the filing, the DXL Board's reversal on the merger followed an evaluation of several developments since the merger agreement was signed in December 2025. The board cited "the increasingly challenging consumer environment," FBB's "continuing decline in operating performance and financial results, including lower-than-expected net sales, net income (loss), adjusted EBITDA and cash flow from operations as compared to both prior-year performance and prior projections," and FBB's increased level of indebtedness. The board also noted concerns regarding FBB's "potential negative equity value" and the "substantial economic dilution that DXL stockholders would experience if the merger were consummated on its current terms."

Despite this determination, the filing states the DXL Board "is contractually obligated under the merger agreement to submit the issuance proposal to DXL stockholders for approval." Under the original merger terms, each share of FBB common stock (subject to specified exclusions including treasury shares, shares held by DXL or its subsidiaries, dissenting shares, and shares held by unaccredited investors) would convert into DXL common stock at an exchange ratio designed to result in FBB stockholders holding 55% and DXL stockholders holding 45% of the combined company on a fully diluted basis using the treasury stock method.

The filing also discloses voting agreements entered into at the time of the merger agreement. Certain DXL stockholders, including current directors (including DXL's interim chief executive officer), DXL's chief financial officer, the former chief executive officer and former director of DXL, and Fund 1 Investments, LLC (an entity for which Pleasant Lake Partners LLC serves as investment advisor), agreed to vote their shares in favor of proposals 1, 2, and 4, subject to the terms of those agreements. The special meeting location is listed as 555 Turnpike Street, Canton, Massachusetts 02021, though the date and time remain as placeholders in this preliminary filing. NASDAQ:DXLG is the registrant.

What Was Disclosed

Destination XL Group filed Amendment No. 5 to its preliminary proxy statement on November 13, 2026, disclosing that the DXL Board no longer recommends the FBB merger while remaining obligated to put the share issuance proposal to a stockholder vote, alongside proposals on a reverse stock split and an incentive plan amendment.