Jos. A. Bank Tightens Up Poison Pill

NEW YORK (TheStreet) - Shares of Jos. A. Bank Clothiers (JOSB) were rising nearly 1% to $55.19 after the menswear retailer amended its shareholder rights plan, in its latest jab against Men's Wearhouse (MW).

The Hampstead, Md.-based menswear retailer said on Friday it amended its shareholder rights plan - commonly known as a "poison pill" -- to reduce the ownership threshold to 10% from 20% of outstanding shares.

Poison pills are corporate governance measures that some companies adopt to thwart hostile takeovers, or are an attempt to deter activist investors. If a potential acquirer is seen to be aggressively buying shares, the plan kicks in by allowing other existing shareholders to buy more shares at a discount, therefore diluting the stake of the potential acquirer.

Jos. A. Bank said its board felt the measures were appropriate "in light of the hostile actions" that Men's Wearhouse has threatened against the company.

"The board felt it was appropriate to protect the company's shareholders by leveling the playing field and ensuring that the Jos. A. Bank Rights Agreement has the same triggering ownership threshold as that of the Men's Wearhouse Rights Agreement," Jos. A. Bank said in a statement.

The shareholder rights amendment is the latest in a series of actions between the two companies over a back and forth over who will get the upper hand in a takeover agreement.

Last week Jos. A. Bank rejected a $1.5 billion takeover proposal by Men's Wearhouse, which valued Jos. A. Bank stock at $55 per share.

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