Men's Wearhouse Launches Increased Hostile Bid for Jos. A. Bank
In the latest twist in the pitched battle between competing clothiers, Men's Wearhouse said Monday it has launched its newly revised hostile takeover offer for Jos. A. Bank.
As The Am Law Daily has reported in the past, Houston-based Men's Wearhouse rejected a $2.3 billion takeover bid by Jos. A. Bank in October, calling the offer "highly opportunistic" and saying that the $48 per share proposal undervalued the company
Jos. A. Bank pulled the offer in early November after Men's Wearhouse adopted a limited shareholder rights plan, or "poison pill," while leaving open the possibility of a follow-up takeover attempt. Men's Wearhouse responded later that month with an unsolicited takeover of its own, offering $55 in cash for each Jos. A Bank share. The Men's Wearhouse tactic, known as a Pac-Man defense, was, in turn, rejected by Jos. A. Bank. The Hampstead, Md.-based clothier said in December that the Men's Wearhouse proposal undervalues the company and was not in its best interest.
Jos. A. Bank took its strategy a step further last week, amending its own poison pill to effectively limit to 10 percent the proportion of the company's shares that a single shareholder can own. Men's Wearhouse reacted to that move Monday by pushing ahead with its hostile bid, raising its offer to $57.50 apiece for each Jos. A. Bank share. That price reflects a premium of 38 percent over the target's closing price on Oct. 8, the day before Jos. A. Bank made its initial offer for Men's Wearhouse. Men's Wearhouse said its tender offer—which values the target at about $1.6 billion—will expire March 28.
Jos. A. Bank reacted to the sweetened offer by urging shareholders not to act on it "until the company's board of directors has announced its recommendation to stockholders." The company said that recommendation will be filed with the Securities and Exchange Commission before Jan.17.
Willkie Farr & Gallagher continues to represent Men's Wearhouse in connection with the takeover bid. The firm's team is being led by corporate and financial services department cochair Steven Seidman, along with corporate partners Michael Schwartz and Laura Delanoy. Willkie previously advised Men's Wearhouse on its rejection of the Jos. A. Bank bid and also in connection with the company's ouster of company founder, chairman and spokesman George Zimmer last summer.
Jos. A. Bank, meanwhile, is represented by attorneys from Skadden, Arps, Slate, Meagher & Flom and St. Louis–based business law boutique Guilfoil Petzall & Shoemake. The two firms also advised Jos. A. Bank on its takeover bid for Men's Wearhouse. Skadden's team includes M&A partners Paul Schnell and Jeremy London, as well as M&A of counsel William Frank and associate Allison Schiffman.