After what can only be called an epic saga, Men’s Wearhouse and Jos. A. Bank are finally merging. In the end, it is Men’s Wearhouse who today announced that it will acquire Jos. A. Bank, the smaller of the two rivals, for $1.8 billion. The deal comes after months of counterbidding, boardroom maneuvering, and shareholder tactics between the two suitors. Here’s Reuters with the walk down memory lane (bolded labels added):
The initial offer: Jos. A Bank’s initial offer for Men’s Wearhouse in October [2013] came soon after Men’s Wearhouse founder George Zimmer was pushed out of the company by the board of directors.
The rebuff: Men’s Wearhouse rebuffed the offer, which spurred Jos. A. Bank to say it could raise its bid if it was allowed access to its larger rival’s books for due diligence.
The activist investor: Hedge fund Eminence Capital LLC, a Men’s Wearhouse shareholder, then put pressure on the company to engage in merger talks with Jos. A. Bank.
The counteroffer: In November, Jos. A. Bank terminated its offer with Men’s Wearhouse. In turn, Men’s Wearhouse struck back at Jos. A. Bank with a $1.5 billion bid which Jos. A Bank turned down.
The “Pac-Man Defense:” Jos. A Bank later said it would acquire clothing brand Eddie Bauer from private equity firm Golden Gate Capital in a bid to stay independent and would start a share buyback worth $300 million after the deal closed.
As part of their merger deal, Jos. A. Bank will terminate its plans to acquire Eddie Bauer, a move that was meant to bulk up the company and make it more difficult and expensive for Men’s Wearhouse to buy. The companies haven’t released information on potential store closings – they duplicate each other in many malls – but according to the Wall Street Journal, the retailers have no plans to rebrand or remodel Jos. A. Bank stores.
Previously in Slate: You’re Going to Hate the Way Our Merger Works – Reduced Competition Guarantees It.
