Men's Wearhouse Turns To Jos. A. Bank Shareholders With Higher Bid

By Anna Rose Welch, Editorial & Community Director, Advancing RNA

Company hopes new $1.6 billion bid will be enough to please investors and rival Jos. A. Bank

In the latest installment of the Men’s Wearhouse and Jos. A. Bank story, Men’s Wearhouse has made another bid for its smaller rival and taken it directly to its shareholders — proving it’s getting tired of playing games. On Monday, Men’s Wearhouse offered a $1.6 billion bid to acquire Jos. A. Bank, not three weeks after Jos. A. Bank rejected its previous $1.5 billion proposal. Upon making its offer, Men’s Wearhouse says, “Although we have made clear our strong preference to work collaboratively with Jos. A. Bank to realize the benefits of this transaction, we are committed to this combination and, accordingly, we are taking our offer directly to shareholders.”

The company also announced its plans to nominate two independent directors to the Jos. A. Bank board. These two nominees include John Bowling, former CEO of Miller Brewing Co., and Arthur Reiner, CEO of Macy’s East.

While there is still some doubt that this offer would be enough to make the two companies finally agree, there is chatter among analysts that this offer could bring the two companies closer to a merger. Avondale Partners LLC analyst Mark Montagna says, “I would anticipate that investors vote in favor of it. Also, they are naming two very highly qualified people to the board.” CEO of Belus Capital Advisors Brian Sozzi says, “This latest raised bid might get Jos. A. Bank to at least have a conversation with Men’s Wearhouse.” Both of these companies agree that combining would be in the best interest for business and their customers. However, so far in this saga, neither one has seemed interested in giving up the lead role of the combined entity.

Indeed, this offer comes a few days after Jos. A. Bank lowered its ownership threshold from 20 percent to 10 percent. This “poison pill defense” was, according to the company, an attempt at leveling the playing field between the two retailers, though it served to make a takeover more difficult.  

Jos. A. Bank has until March 28 to make a decision, though it has said it will review the offer and make a recommendation to shareholders on or before Jan. 17.

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