Men's Wearhouse Likes The Way Jos. A. Bank Looks

By Sam Lewis

Less than two week after Jos. A. Bank dropped its bid on Men’s Wearhouse, Men’s Wearhouse makes an offer to acquire its competitor

The story begins in early October. Specialty men’s retailer, Jos. A. Bank, put its sights on acquiring it main competition, troubled men’s specialty retailer, Men’s Wearhouse. Jos. A. Bank made an offer of $2.3 billion to acquire Men’s Wearhouse, which was rejected. Jos. A. Bank said it would consider raising its asking price if it were given limited access to private financial records. Men’s Wearhouse again refuted the notion, and no further action was seen. Jos. A. Bank stuck by its word of abandoning its pursuit of Men’s Wearhouse if a deal was not struck by Nov 14, but would be open to future negotiations. Jos. A. Bank’s Chairman, Robert Wildrick, even went as far using an unusual tactic, saying his company would be receptive to being purchased by Men’s Wearhouse instead of the reverse.

Now, it seems Men’s Wearhouse has turned the table on Jos. A. Bank, taking Wildrick up on his offer. Men’s Wearhouse has offered Jos. A. Bank $55 dollars per share, almost 9 percent over the company’s Monday closing share price, to acquire its rival. “After a thorough review, our board concluded that an acquisition of Jos. A. Bank by Men's Wearhouse has strategic logic and the potential to deliver substantial benefits to our respective shareholders, employees and customers,” says Bill Sechrest, lead director of Men's Wearhouse.

Since Men’s Wearhouse has the advantage in size, growth, and performance, the merging of the two companies would best be accomplished through an acquisition of Jos. A. Bank, reads the Men’s Wearhouse press release. The Men’s Wearhouse proposal has no mention of any third-party equity investments, which if included, end up raising costs. It also is does not include any conditions based on financing. Additionally, no further rebranding or remodeling of Jos. A. Bank stores would take place. Jos. A. Bank’s company banner would remain the same, management would consist of individuals from each company, and use the best practices of both companies.

 If a deal is reached, the two companies would form the largest men’s apparel manufacturer and retailer in the U.S. Should this merger happen, Men’s Wearhouse expects to pay for the transaction through a combination of cash and debt financing.

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