Men’s Wearhouse Inc. (MW) urged Jos. A. Bank Clothiers Inc.’s (JOSB) independent directors to reconsider its $1.61 billion bid and said it’s prepared to increase the offer if additional value can be found during due diligence.
The independent directors should form a special committee and enter negotiations immediately, the Houston-based company said today in a statement.
Men’s Wearhouse has been working to convince shareholders to accept its tender offer, which expires March 28, saying today that a combined business would bring “superior” value to what Jos. A. Bank could create as a standalone company. The retailer also has said it will nominate two independent directors to Jos. A. Bank’s board at its 2014 annual meeting.
“The chance of a deal is still more than 50-50, but given the greater time involved, the risk has increased and the uncertainty has increased as valuations move around,” Richard Jaffe, a New York-based analyst with Stifel Financial Corp., said in a phone interview today.
Jaffe has a hold rating on Men’s Wearhouse shares.
Tom Davies, a spokesman for Jos. A. Bank with Kekst & Co., declined to comment.
Men’s Wearhouse rose 2 percent to $47 at the close in New York and had gained 64 percent last year. Jos. A. Bank advanced 1.6 percent to $55.71 and ended 2013 up 29 percent.
Jos. A. Bank told shareholders in a Jan. 17 filing to reject the $57.50-a-share offer, saying it wasn’t in the best interest of stock owners. The bid was increased earlier this month from the $55-a-share offer made on Nov. 26. The Hampstead, Maryland-based retailer has said it is seeking its own acquisitions to boost shareholder value.
Today’s letter is the latest development in a saga that began in October, when Jos. A. Bank made a $2.3 billion bid for Men’s Wearhouse. The latter rejected the offer and embarked on a $1.54 billion bid for its rival.
Men’s Wearhouse has said it will nominate two independent directors to Jos. A. Banks’s board at its 2014 annual meeting. The nominees include John Bowlin, a former chief executive officer of Miller Brewing Co., and Arthur Reiner, who served as chairman and CEO of Macy’s East.
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