Men’s Wearhouse Enters NDA with Jos. A. Bank

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Men’s Wearhouse Enters NDA with Jos. A. Bank

The Men’s Wearhouse, Inc. (NYSE:MW) said Monday that it has reached a nondisclosure agreement with Jos. A. Bank Clothiers Inc (NASDAQ:JOSB), brightening their merger prospects.

Hostile on-again, off-again relationship

Last week, it was reported Jos. A. Bank Clothiers Inc, which flatly rejected an offer from The Men’s Wearhouse, Inc. (NYSE:MW) of $63.50 per share and was in the process of courting Eddie Bauer, may be open to The Men’s Wearhouse, Inc. advances after all. 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.  The statement said: “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”.

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Agreement to facilitate sharing sensitive information

As part of the nondisclosure agreement reported today, Jos. A Bank indicated that it has submitted a draft merger agreement to Men’s Warehouse.

The confidentiality agreement would facilitate the two to begin sharing sensitive business information, after Jos. A. Bank Clothiers Inc (NASDAQ:JOSB) indicated last week that it was willing to entertain discussions with Men’s Wearhouse if they could lead to a higher takeover bid.

Jos. A. Bank’s failed bid

Last year, Jos. A. Bank mounted a failed $2.3 billion bid to acquire its larger competitor, The Men’s Wearhouse. Pressure had been building on the two competitors to merge, in particular from The Men’s Wearhouse, Inc. 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.

Interestingly, as a defensive measure, Jos. A. Bank indicated last month that it was in discussion to acquire apparel fellow retailer Eddie Bauer. It is believed if the deal is consummated, it would dramatically shake up the takeover bid of Jos. A. Bank against The Men’s Wearhouse, Inc. (NYSE:MW).

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