Jos. A. Bank Willing To Talk After Rejecting Men's Wearhouse's Sweetened Offer

(RTTNews) - Jos. A. Bank Clothiers, Inc. (JOSB) on Thursday said its board has unanimously rejected larger rival Men's Wearhouse, Inc.'s (MW) sweetened $63.50 per share unsolicited offer to acquire it as inadequate, but said it is open to discussions on a possible deal and a further sweetened offer.

Meanwhile, Jos. A. Bank has agreed to meet with Men's Wearhouse for talks on the deal to gauge the highest price that Men's Wearhouse is prepared to pay and the transaction structure.

Hampstead, Maryland-based Jos. A. Bank Chairman Robert Wildrick stated in a letter to Men's Wearhouse President and CEO Douglas Ewert that it would then like to proceed quickly given the compelling nature of the Eddie Bauer deal for shareholder value creation.

Jos. A. Bank's board of directors unanimously rejected the unsolicited offer as inadequate, after giving effect to the Eddie Bauer acquisition, and as not in the best interests of Jos. A. Bank shareholders.

Jos. A. Bank's board has also recommended that its shareholders reject the offer and not tender their shares into the offer. Jos. A. Bank believes that the proposed Eddie Bauer acquisition will create significant shareholder value.

"However, in our Board's continuing effort to evaluate which alternative transaction would create the greatest value for Jos. A. Bank shareholders, and on the basis of your unsolicited revised proposal indicating a willingness to pay a higher price subject to certain conditions, our Board has authorized our meeting with you to establish a process that will enable you to advise our Board as to the highest price you are prepared to pay in an acquisition of Jos. A. Bank," Wildrick wrote in the letter.

Meanwhile, Jos. A. Bank is still cooperating with the Federal Trade Commission and continues to provide additional information on competitive dynamics related to Men's Wearhouse's hostile tender offer.

The FTC has already granted early termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 with respect to Jos. A. Bank's proposed acquisition of Eddie Bauer, which was agreed upon on February 14..

Jos. A. Bank confirmed that the funding for the Eddie Bauer acquisition is proceeding on track, with a fully committed bridge loan by Goldman Sachs.

Houston, Texas-based Men's Wearhouse had on Monday sweetened its offer for Jos. A. Bank to $63.50 a share, and also offered to up the ante to $65.00 if the clothing retailer terminates its deal to buy Eddie Bauer.

Men's Wearhouse had launched an hostile sweetened offer of $57.50 per share on January 6 and commenced a cash tender to acquire Jos. A. Bank in an all-cash deal valued at about $1.6 billion. It had originally offered $55.00 per share on November 26, after Jos. A. Bank withdrew its acquisition offer for Men's Wearhouse.

The flurry of acquisition bids between Men's Wearhouse and Jos. A. Bank began nearly five months ago, when Jos. A. Bank offered to buy its bigger rival Men's Wearhouse for $2.3 billion on October 9. However, Men's Wearhouse immediately rejected that offer, and launched a counter bid to buy Jos. A. Bank for $1.2 billion, which was then sweetened to about $1.6 billion.

MW closed Thursday's regular trading session at $50.42, up $0.74 or 1.49% on a volume of 0.59 million shares, and gained a further $1.48 or 2.94% in after-hours trading.

JOSB closed at $60.30, up $0.35 or 0.58% on a volume of 0.53 million shares, and gained a further $1.80 or 2.99% in after-hours trading.