• News
  • SAN DIEGO
  • Finance

Men's Wearhouse lifts takeover bid for Jos A Bank

FREMONT, Calif. (AP) -- Men's Wearhouse is stepping up its pursuit of Jos. A. Bank Clothiers Inc., boosting the takeover offer for its rival by 10 percent to about $1.78 billion.

The move comes 10 days after Jos. A Bank announced that it was planning to buy the parent company of Eddie Bauer in a cash-and-stock deal valued at $825 million. But at the time Jos. A. Bank left the door open: saying that it may end the Eddie Bauer deal if it receives an acquisition offer that is superior.

Men's Wearhouse Inc. said Monday it's now offering $63.50 per share for Jos. A. Bank, up from its prior $57.50 per share bid. The new offer, which is set to expire on March 12, is conditioned on Jos. A. Bank ending its deal for Eddie Bauer. Other conditions include Jos. A. Bank's directors redeeming or invalidating the shareholder rights plan that's in place.

Men's Wearhouse said it may even raise the bid further, to $65 per share, if it is able to examine Jos. A. Bank's books and given access to the company's management team.

Men's Wearhouse President and CEO Doug Ewert said in a statement that it would even be willing to talk about offering Jos. A. Bank shareholders the opportunity to choose to receive Men's Wearhouse stock for part of its proposal.

Ewert said there's been “extensive dialogue” with both companies' shareholders over the past several months and that there's “widespread support” for the potential transaction.

Jos. A. Bank did not immediately respond to an email seeking comment.

But even as it raised its offer, Men's Wearhouse announced Monday that it filed a lawsuit in Delaware against Jos. A. Bank and its board and the companies involved in the Eddie Bauer transaction. The lawsuit alleges Jos. A. Bank's board breached its fiduciary duties by adopting “unreasonable, shareholder unfriendly and illegal defensive measures” designed to thwart Men's Wearhouse's offer, prevent a change of control, fill the board with allies, interfere with the upcoming vote for two board members and entrench the existing board.

Men's Wearhouse previously announced that it planned to nominate two independent director candidates for Jos. A. Bank's board at its annual meeting.

Men's Wearhouse said that it wants the court to find that Jos. A. Bank's directors breached their fiduciary duties. It also wants the court to order Jos. A. Bank's board to rescind its shareholder rights plan and provide an order enjoining the companies from moving forward with the Eddie Bauer deal.

The back-and-forth between Men's Wearhouse and Jos. A. Bank started in October, when Jos. A. Bank offered to buy its larger rival for $2.3 billion. Men's Wearhouse scoffed at that offer, and turned the tables, offering to buy its rival for $1.54 billion. But after Hampstead, Md.-based Jos. A Bank turned down that overture, Men's Wearhouse increased its bid to $1.6 billion.

Men's Wearhouse and Jos. A. Banks cater to different customers, but offer similar types of clothing: suits and sport coats.

Shares of Men's Wearhouse gained $3.39, or 7.5 percent, to $48.50 in premarket trading, while Jos. A. Bank's stock added $4.14, or 7.5 percent, to $59.19.

Leave Your Comment

Comments are moderated by SDDT, in accordance with the SDDT Comment Policy, and may not appear on this commentary until they have been reviewed and deemed appropriate for posting. Also, due to the volume of comments we receive, not all comments will be posted.

SDDT Comment Policy: SDDT encourages you to add a comment to this discussion. You may not post any unlawful, threatening, defamatory, obscene, pornographic or other material that would violate the law. All comments should be relevant to the topic and remain respectful of other authors and commenters. You are solely responsible for your own comments, the consequences of posting those comments, and the consequences of any reliance by you on the comments of others. By submitting your comment, you hereby give SDDT the right, but not the obligation, to post, air, edit, exhibit, telecast, cablecast, webcast, re-use, publish, reproduce, use, license, print, distribute or otherwise use your comment(s) and accompanying personal identifying and other information you provide via all forms of media now known or hereafter devised, worldwide, in perpetuity. SDDT Privacy Statement.

User Response
0 UserComments

Leave Your Comment

Comments are moderated by SDDT, in accordance with the SDDT Comment Policy, and may not appear on this commentary until they have been reviewed and deemed appropriate for posting. Also, due to the volume of comments we receive, not all comments will be posted.

SDDT Comment Policy: SDDT encourages you to add a comment to this discussion. You may not post any unlawful, threatening, defamatory, obscene, pornographic or other material that would violate the law. All comments should be relevant to the topic and remain respectful of other authors and commenters. You are solely responsible for your own comments, the consequences of posting those comments, and the consequences of any reliance by you on the comments of others. By submitting your comment, you hereby give SDDT the right, but not the obligation, to post, air, edit, exhibit, telecast, cablecast, webcast, re-use, publish, reproduce, use, license, print, distribute or otherwise use your comment(s) and accompanying personal identifying and other information you provide via all forms of media now known or hereafter devised, worldwide, in perpetuity. SDDT Privacy Statement.