Jos. A. Bank Clothiers Inc (NASDAQ:JOSB) is in discussion to acquire apparel fellow retailer Eddie Bauer, according to a report in The Wall Street Journal. However other details, including the price couldn’t be learned.
If the Eddie Bauer deal is consummated, it would dramatically shake up the takeover battle that Jos. A. Bank has been waging with rival The Men’s Wearhouse, Inc. (NYSE:MW).
ValueWalk's Raul Panganiban interviews Kirk Du Plessis, Founder and CEO of Option Alpha, and discuss Option Alpha and his general approach to investing. Q1 2021 hedge fund letters, conferences and more The following is a computer generated transcript and may contain some errors. Interview with Option Alpha's Kirk Du Plessis
Reportedly acquiring Golden Gate stake
According to The Wall Street Journal report, Jos. A. Bank Clothiers Inc (NASDAQ:JOSB) is in talks to buy fellow apparel retailer Eddie Bauer from private-equity firm Golden Gate Capital. The private-equity firm bought Eddie Bauer out of bankruptcy in 2009 for $286 million in cash plus the assumption of hundreds of millions of dollars in liabilities.
Citing people familiar with the matter, The Wall Street Journal reports that Jos. A. Bank Clothiers Inc (NASDAQ:JOSB) has signed nondisclosure agreements related to possible acquisitions of other companies besides The Men’s Wearhouse, Inc. (NYSE:MW). It isn’t clear whether the company is seriously pursuing any other deal besides Eddie Bauer.
Eddie Bauer was founded in 1920 and makes casual clothing, sportswear and outerwear for men and women. The retailer has around 370 stores in the U.S. and Canada.
Pursuer rather than the pursued
Last year, Jos. A. Bank mounted a failed $2.3 billion bid to acquire its larger competitor, The Men’s Wearhouse, Inc. (NYSE:MW).
Last month, The Men’s Wearhouse, Inc. (NYSE:MW) announced a hostile $1.61 billion, or $57.50 per share takeover of Jos. A. Bank Clothiers Inc (NASDAQ:JOSB), raising the ante on its previous bid of $55 per share bid and a six percent premium to the prevailing market price.
Pressure had been building on the two competitors to merge, in particular from The Men’s Wearhouse, Inc. (NYSE:MW) largest shareholder, New York-based hedge fund Eminence Capital, LLC, which owns just under 10% of the stock. Eminence had sought a merger between the two suit retailers and unveiled its goal in a presentation on November 20, 2013.
The Men’s Wearhouse, Inc. (NYSE:MW) indicated last week that it was open to sweetening its spurned buyout offer for Jos. A. Bank Clothiers Inc (NASDAQ:JOSB) under certain conditions. The larger retailer called on the independent directors of Jos. A. Bank to reconsider its bid.