Men's Wearhouse Rips "Opportunistic" Jos. A. Bank Bid
UPDATE, 10/10/13, 2:50 p.m. EDT: The name of an additional Skadden partner has been added to this article's fifth paragraph.
Nearly four months after representing the board of The Men's Wearhouse in the ouster of company founder and chairman George Zimmer, Willkie Farr & Gallagher is now helping the men's clothing retailer fend off an unsolicited $2.3 billion takeover bid by Jos. A. Bank Clothiers.
The Men's Wearhouse board rejected the offer Wednesday shortly after Jos. A. Bank announced it, calling its rival's proposed acquisition "highly opportunistic" and saying that, at $48 per share, the bid undervalues the company. In a statement, the Houston-based company's board cited a recent 12 percent decline in its stock price as a likely motivator for the timing of the offer, while at the same time blaming the dip on "difficult market conditions" and pledging to deliver better value to Men's Wearhouse shareholders in the future. (The Jos. A. Bank offer represents a premium of 36 percent over Men's Wearhouse's $35.24 Tuesday closing price, though shares of the company were trading at more than $45 apiece following the announcement of the bid on Wednesday.)
The board also questioned whether Jos. A. Bank—which has 623 stores compared to Men's Wearhouse's more than 1,100 locations—would be able to secure antitrust approval for any deal, and added that the offer is "highly conditional" given its reliance on debt and equity financing.
In the announcement trumpeting its offer, which it released early Wednesday, Hampstead, Maryland–based Jos. A. Bank said its proposal would create "immediate and certain value" for Men's Wearhouse shareholders and that combining the two companies would create the leading men's apparel and sportswear company in the United States. Jos. A. Bank said it would finance the transaction with a mixture of cash on hand, new equity provided by private equity firm Golden Gate Capital, and debt financing that the company says its financial advisers at Goldman Sachs are "highly confident" can be obtained.
Skadden, Arps, Slate, Meagher & Flom is advising Jos. A. Banks on its takeover bid with a team that includes M&A partners Paul Schnell and Jeremy London in New York and Washington, D.C., respectively. Corporate finance partner Laura Kaufmann Belkhayat, M&A of counsel William Frank, and associate Allison Schiffman are also working on the matter.
Also providing Jos. A. Bank with legal advice is St. Louis–based business law boutique Guilfoil Petzall & Shoemake, which previously represented the retailer in a consumer fraud class action related to the company's advertisements. That case was dismissed in federal court in New Jersey earlier this year. Charles Frazer is Jos. A. Bank's general counsel.
The takeover comes in the wake of Men's Wearhouse's public parting with George Zimmer, who founded the company in 1973 and had served as its chairman and television pitchman for decades. In June the company's board terminated Zimmer, who claimed at the time that the firing was in response to concerns he'd expressed about the direction of the company.
As The Am Law Daily reported at the time, Willkie represented the Men's Wearhouse board in its firing of Zimmer with a team led by New York–based partner Steven Seidman, cochair of the firm's corporate and financial services department. Now, Seidman is once again leading the way for Willkie, representing the Men's Wearhouse board with respect to the takeover attempt. Corporate partners Michael Schwartz, Laura Delanoy, and Jeffrey Hochman are also working on the matter, along with associate Laura Acker. Carol Souvenir serves as Men's Wearhouse's chief legal officer.