The Deal: Men's Wearhouse-Jos. A. Bank Deal Odds
NEW YORK ( The Deal ) - Though men's clothing retailers Men's Wearhouse
Houston-based Men's Wearhouse on Monday morning commenced an unsolicited tender offer for Jos. A. Bank's outstanding shares with a bid that was raised from its prior offer of $55 per share.
In response, Jos. A. Bank told shareholders not to take any action until it had a chance to review the proposal, the Baltimore-based company said Monday afternoon. The company said it would respond to the offering via a regulatory filing by Jan. 17.
On Friday, in anticipation of a hostile move by Men's Wearhouse, Jos. A. Bank reduced the threshold for triggering its poison pill to 10% from 20%.
It is the latest maneuver in a struggle between the two menswear retailers, which, while basically agreeing they would be better off together, differ over which company should acquire which and the terms of a merger.
The tug-of-war was triggered in late September when Jos. A. Bank made an unsolicited proposal to acquire Men's Wearhouse for $48 per share or $2.3 billion.
But when Men's Wearhouse refused to even discuss deal terms, Jos. A. Bank pulled its offer at the pre-set termination date of Nov. 14, and claimed it was open to pursuing other acquisitions.
Now a source close to the situation would not comment on whether Jos. A. Bank had other merger and acquisition opportunities outside of a combination with Men's Wearhouse.
Activist investor Eminence Capital, which holds a 9.8% stake in Men's Wearhouse, has also altered its tune. Rather than calling for a sale of the company, it now appears to support the Houston-based company's move to buy Jos. A. Bank.
In an e-mailed statement, Eminence CEO Ricky Sandler said, "We are encouraged by the increased bid MW made for JOSB and by its commitment to consummate a combination as demonstrated by its tender offer and nomination of a director slate. We continue to believe that a merger of these two companies is in the best interests of all shareholders."
Eminence had also previously criticized Men's Wearhouse's board for its handling of the Jos. A. Bank offer and management for its inability to achieve certain performance targets, but a source familiar with the hedge fund's thinking said the firm's approach could change, depending on the deal terms.
Jos. A. Bank has a staggered board but the two directors up for re-election this year are chairman Robert Wildrick and CEO Neal Black. As a result, successfully ousting those two board members could have immediate benefits for Men's Wearhouse's deal prospects.