Is The Volatile Jos. A. Bank / Men’s Wearhouse Saga Coming To An End?

Is The Volatile Jos. A. Bank / Men’s Wearhouse Saga Coming To An End?
By Dwight Burdette (Own work) [CC BY 3.0], via Wikimedia Commons

The hostile on again, off again relationship between Jos. A. Bank Clothiers Inc (NASDAQ:JOSB) and The Men’s Wearhouse, Inc. (NYSE:MW) may be coming to a conclusion.

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Jos. A. Bank Clothiers Inc (NASDAQ:JOSB), which yesterday flatly rejected an offer from Men’s Wearhouse of $63.50 per share and was in the process of courting Eddie Bauer, may be open to The Men’s Wearhouse, Inc. (NYSE:MW) advances after all.

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Holding out for higher price

In a press statement, the men’s clothing company said it would be willing to meet with its hostile suitor The Men’s Wearhouse, Inc. (NYSE:MW). “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,” the statement said.

In letter Jos. A. Bank lets Men’s Wearhouse know it has other options

In a letter to Men’s Wearhouse, Jos. A. Bank CEO Robert Wildrick was careful to issue an opening to Men’s Wearhouse while at the same time holding out the potential to acquire Eddie Bauer.  “The Jos. A. Bank Clothiers Inc (NASDAQ:JOSB) Board has acted in a very careful, thorough and focused manner to evaluate which of various strategic alternatives would create the greatest value for shareholders and serve the best interests of shareholders,” the letter said. “Given the careful attention our Board has paid to maximizing shareholder value, we strongly disagree with your characterization of our Board’s actions. Our Board continues to believe that significant value will be created for our shareholders in our proposed acquisition of Eddie Bauer and the related issuer tender offer. We are also mindful that, unlike The Men’s Wearhouse, Inc. (NYSE:MW)’s proposal, there is no antitrust or other significant obstacle to completing that transaction. “

Readers will recall in Wednesday’s ValueWalk we noted the matter was in the process of heading to court in an expedited fashion.  A Delaware judge ruled on Tuesday that the Men’s Wearhouse lawsuit blocking Jos. A. Bank’s acquisition plans to acquire Eddie Bauer could proceed.  The acquisition is viewed as an attempt to block The Men’s Wearhouse, Inc. (NYSE:MW) takeover plans of Jos. A. Bank Clothiers Inc (NASDAQ:JOSB), who has been fighting the attempt.  We also noted the overlap hedge fund ownership between the two companies was interesting, as they could be playing the game behind the scenes to make sure the deal occurs.

The complex and often volatile relationship between the two competitors may be headed for a happy ending.

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Mark Melin is an alternative investment practitioner whose specialty is recognizing a trading program’s strategy and mapping it to a market environment and performance driver. He provides analysis of managed futures investment performance and commentary regarding related managed futures market environment. A portfolio and industry consultant, he was an adjunct instructor in managed futures at Northwestern University / Chicago and has written or edited three books, including High Performance Managed Futures (Wiley 2010) and The Chicago Board of Trade’s Handbook of Futures and Options (McGraw-Hill 2008). Mark was director of the managed futures division at Alaron Trading until they were acquired by Peregrine Financial Group in 2009, where he was a registered associated person (National Futures Association NFA ID#: 0348336). Mark has also worked as a Commodity Trading Advisor himself, trading a short volatility options portfolio across the yield curve, and was an independent consultant to various broker dealers and futures exchanges, including OneChicago, the single stock futures exchange, and the Chicago Board of Trade. He is also Editor, Opalesque Futures Intelligence and Editor, Opalesque Futures Strategies. - Contact: Mmelin(at)
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