Men's Wearhouse Sweetens Bid For Jos. A. Bank, Files Suit - Update

(RTTNews) - Men's Wearhouse Inc. (MW) sweetened its offer for Jos. A. Bank Clothiers Inc. (JOSB) to $63.50 a share, and has also offered to up the ante to $65.00 if the clothing retailer terminates its deal to buy Eddie Bauer.

The latest tender offer of $63.50 a share expires at 5:00 p.m. on Wednesday, March 12, 2014. Men's Wearhouse said it could potentially increase its offer price to $65.00 a share if it is allowed to conduct due diligence and Jos. A. Bank terminates its recently announced deal to buy Eddie Bauer.

On February 14, Jos. A. Bank announced a deal to buy Everest Holdings LLC, the parent company of the Eddie Bauer brand, as an attempt to spoil the takeover attempt of Men's Wearhouse.

Men's Wearhouse has also filed a lawsuit against Jos. A. Bank alleging that the retailer failed to work in the best interest of its shareholders and "breached its fiduciary duties by adopting a series of unreasonable, shareholder unfriendly and illegal defensive measures designated to thwart the Men's Wearhouse tender offer."

Men's Wearhouse has asked the court to order Jos. A. Bank to cancel its poison pill strategy and abandon the Eddie Bauer deal.

The acquisition battle between Men's Wearhouse and Jos. A. Bank started about three months ago, when Hampstead, Maryland-based Jos. A. Bank offered to buy its bigger rival Men's Wearhouse for $2.3 billion. 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.

Chief Executive Doug Ewert said, "We urge the Jos. A. Bank Board of Directors to immediately engage in negotiations with Men's Wearhouse so we can capitalize on the opportunity we have to enter into a transaction that creates significant value for shareholders of both companies."

Ewert also said the company is also willing to discuss about giving Jos. A. Bank shareholders a portion of the takeover payment as Men's Wearhouse stock.

Hedge fund Eminence Capital LLC, which owns bout 5 percent stake in Jos. A. Bank, in a statement said it supported the new, superior offer from Men's Wearhouse.

"We are extremely pleased that Men's Wearhouse has made a full and fair offer for Jos. A. Bank," said Ricky Sandler, Chief Executive Officer of Eminence Capital.

JOSB is currently trading at $59.72, up $4.67 or 8.48%, on a volume of 3.3 million shares on the Nasdaq.

MW is currently trading up $48.30, up $3.19 or 7.07%, on a volume of 1.7 million shares on the NYSE.