Men's Wearhouse Makes Bid for Jos. A Bank After Rejecting Sale

Tuesday, 26 Nov 2013 05:31 PM

By David Ogul

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Men’s Wearhouse, which recently fought off a $2.3 billion takeover bid from Jos. A. Bank Clothiers, is turning the tables with its own $1.5 billion bid for the smaller rival.

CNN said Men’s Wearhouse is offering $55 in cash for each share of Jos. A. Bank, about 9 percent more than the stock was selling before the bid. Jos. A. Bank stock rose to more than $56 a share after the news broke; Men’s Wearhouse shares were up 7.7 percent to nearly $51.

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Jos. A. Bank said it would evaluate the proposal and respond “in due course.”

The companies combined would create the fourth largest men’s apparel retailer in the country with some 1,700 locations. Jos. A. Bank would continue to operate at its current location and with its current name, Forbes said. Men’s Wearhouse estimates combined sales would reach $3.5 billion.

Forbes reported the offer at $1.3 billion. Either way, it is the latest in a series of notable moves involving Men’s Wearhouse, which was founded in 1973 by George Zimmer, known to television viewers for his commercials with the catchphrase, “You’re going to like the way you look; I guarantee it.”

Zimmer, the company’s chairman and largest individual shareholder, was fired earlier this year, with management saying he wasn’t supporting of the firm’s new CEO and had “difficulty accepting the fact that Men’s Wearhouse is a public company with an independent board of directors.”

In October, Jos. A. Bank offered $48 a share for Men's Wearhouse, but abandoned the deal after it wasn’t accepted by a Nov. 14 deadline. Men’s Wearhouse, meanwhile, is still in the midst of a proxy fight by Eminence Capital, which owns just under 10 percent of the company.

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The New York Times wrote that the Men’s Wearhouse bid “is an acknowledgment that the two companies should be combined.” It added: “These negotiations will turn on which company is the better acquirer and which management team will prevail. Men’s Wearhouse acknowledged this in its news release stating that 'our experienced management team is best positioned to execute the integration of our companies' but that exact management of the companies was up for discussion.”

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