NEW YORK (The Deal) -- Men's Wearhouse (MW) said Wednesday it received a second request for information from the Federal Trade Commission, extending the antitrust review of the company's $1.6 billion hostile tender offer for rival men's clothing retailer Jos. A. Bank Clothiers (JOSB) .
An extension of the review would be the first step by the FTC toward challenging the deal on antitrust grounds, but at this stage merely issuing a second request doesn't indicate the commission staff has concluded the deal will harm competition. The second request in this instance may be nothing more than the FTC needing a few more days to get comfortable with the transaction.
Because the offer is an all-cash tender, the initial waiting period under the Hart-Scott-Rodino Act was only 15 days, half the time antitrust regulatory typically have to clear a deal or issue a second request. Nevertheless, the FTC's move does disprove the contention made by some players in the battle for the retailers that antitrust risks presented by the deal are "virtually non-existent."
Whether a merger of the two companies would face a tough road before antitrust regulators has played a role in the companies' public relations campaigns as they have made subsequent offers for each other.
In the process of successfully fending off Jos. A. Bank's offer last fall, Men's Wearhouse cited antitrust risks as a reason to reject the deal. But the notion that antitrust regulators would block the deal was mocked by an activist investment firm that has been pushing for the two companies to merge.