This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

The Deal: Men's Wearhouse-Jos. A. Bank Deal Odds

NEW YORK (The Deal) - Though men's clothing retailers Men's Wearhouse (MW) and Jos. A. Bank Clothiers (JOSB) appear to be on a collision course with Men's Wearhouse's new $57.50 per share hostile takeover bid - about $1.61 billion - indications from people familiar with the deal are that there is more wriggle room left for a merger.

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.

The two board members Men's Wearhouse is nominating to replace Wildrick and Black are John Bowlin, previously CEO of Miller Brewing Co., and Arthur Reiner, formerly CEO of Macy's East, a former division of the Macy's Inc. department store chain.

Jos. A. Bank has yet to announce the date for the company's annual shareholders' meeting.

Goldman Sachs and Financo are providing Jos. A. Bank with financial advice, while Skadden, Arps, Slate, Meagher & Flom and Guilfoil Petzall & Shoemake are serving as the company's legal advisers.

Providing Men's Wearhouse with financial advice is Bank of America Merrill Lynch and JPMorgan Securities, and providing legal advice is Willkie Farr & Gallagher.

Written by Richard Collings.

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,001.22 -38.27 -0.22%
S&P 500 1,988.40 -3.97 -0.20%
NASDAQ 4,538.5510 +6.4470 0.14%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs