Men’s Wearhouse Makes New Offer for Jos. A. Bank

Men’s Wearhouse has made another offer for rival Jos. A. Bank, this time for $57.50 per share or $1.6 billion—a 52 percent premium over the retailer’s unaffected enterprise value and a 38 percent premium over its October 8 share price. The offer will expire on March 28.

Jos. A. Bank amended its shareholder rights plan last week, reducing the ownership threshold from 20 percent to 10 percent.

Men’s Wearhouse CEO Doug Ewert said he is also planning to nominate two people to Jos. A. Bank’s board at its annual meeting: former Miller Brewing CEO John D. Bowlin and former Macy’s East CEO Arthur E. Reiner. The date for that meeting has yet to be announced.

“We believe that our $57.50 per share proposal to acquire Jos. A. Bank is compelling and provides substantial value and immediate liquidity to Jos. A. Bank shareholders,” said Ewert in a statement. “Although we have made clear our strong preference to work collaboratively with Jos. A. Bank to realize the benefits of this transaction, we are committed to this combination and, accordingly, we are taking our offer directly to shareholders.”

Regarding the board nominees, Ewert added, “We believe they will act in the best interest of Jos. A. Bank’s shareholders by carefully evaluating the compelling and value creating opportunity represented by the Men’s Wearhouse offer. We urge Jos. A. Bank shareholders to tender into our offer in order to send a strong message that Jos. A. Bank should engage in good-faith negotiations immediately so we can complete this value creating transaction.”

Jos. A. Bank’s board acknowledged the moves by Ewert and Men’s Wearhouse, but had no comment.

The back-and-forth between the two men’s suit retailers began in early fall with Jos. A. Bank’s then secret $2.3 billion bid for Men’s Wearhouse. It became public in October, and Men’s Wearhouse unceremoniously rejected it as unwelcome and too low.

Eminence Capital, which holds a 9.8 percent stake in Men’s Wearhouse began pushing for deal in November, saying that although the first offer was too low, Jos. A. Bank and its backer, Golden Gate Capital, were clearly open to negotiate while Men’s Wearhouse was not. In a presentation, Eminence said a merger between the two retailers would result in “significant value creation through cost savings and revenue synergies” and “an enhanced focus on the high margin core business of men’s apparel and tuxedo.”

But Men’s Wearhouse turned the tables on November 26, making a $1.2 billion offer for Jos. A. Bank in what has since the 1980s been called the “Pac Man defense.” After nearly a month, Jos. A. Bank rejected the offer, saying it was too low.