Market Overview

Pride & Retailers: JOSB/MW Saga Continues


On Monday morning, The Men's Wearhouse, Inc. (NYSE: MW) announced that it has raised its cash offer for Jos. A. Bank Clothiers, Inc. (NASDAQ: JOSB) from $57.50 per share to $63.50.

Shares of both companies have rallied and gained approximately nine percent following the press release and Eminence Capital's strong support.

The Early Flirtation

The Men's Warehouse and Jos. A. Bank saga continues after months of give and take in the relationship between the two retailers. It is a story more desperate than Romeo and Juliet and a tale more complex than Pride and Prejudice. The two companies continue to flirt and argue amid a strong push from the "best friend" Eminence Capital.

On October 9, 2013, Jos. A. Bank offered to acquire Men's Wearhouse for $48.00 per share. Days after Men's Wearhouse refusal, the company turns the bid around. On November 26, Men's announced that it has proposed to acquire Jos. A. Bank for $55.00 per share. Over the following months, the companies sent letters to each other that were more eloquent than Elizabeth Bennett's words. They were offended by the low offers and astounded by each other's lack of response.

The Give and Take

As the new year came, so did the resolutions. Men's Wearhouse announced a new proposal to Jos. A. Banks for $57.50 per share on January 6. Unfortunately, not all parties felt that their voice was heard and were willing to negotiate. On February 2, 2014, the directors of Jos. A. Bank Clothiers wrote, "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."

Reaching out to Jos. A. Banks again, Men's Wearhouse announced that it has raised the cash tender offer to $63.50 on Monday. The offer which expires at 5:00 p.m. on March 12, should give the coy clothier a chance to re-think the offer, especially as the offer is contingent on the termination of the Eddie Bauer agreement. After all, Men's is only interested in a monogamous relationship.

Doug Ewert, President and Chief Executive Officer of Men's Wearhouse, commented, "We urge the Jos. A. Bank Board of Directors to immediately engage in negotiations with Men's Wearhouse so we can capitalize on the opportunity we have to enter into a transaction that creates significant value for shareholders of both companies. Our increased cash offer would provide Jos. A. Bank shareholders with a substantial premium and immediate and certain value, and we are prepared to further increase our offer price on the basis of limited due diligence."

The Dance Begins

As both companies Board of Directors consult with their friends and family, Eminence Capital (which owns almost 5% of Jos. A. Bank common stock) can no longer hide its support and excitement for this romance- or merger. Eminence's CEO Ricky C. Sandler announced, " announced, "We are extremely pleased that Men's Wearhouse has made a full and fair offer for Jos. A. Bank. We have maintained all along that the combination of these two great companies is the best outcome for all shareholders. We believe this offer clearly represents a superior alternative for Jos. A. Bank shareholders compared to remaining independent and acquiring Eddie Bauer. If the Board of Jos. A. Bank properly fulfills its fiduciary duty, we expect it will come to the conclusion that it should accept this offer to merge with Men's Wearhouse and move ahead with the limited confirmatory due diligence requested by Men's Wearhouse to solidify $65 per share offer price."

With the street tuned and gossip reel on repeat, the orchestra starts to play. The dance has begun and the investors cheer on Jos. A. Bank to join in the waltz.

Posted-In: M&A News Offerings


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