Men’s Wearhouse increases offer for Jos. A. Bank
FREMONT, Calif. – Despite rebuked overtures on both sides, Men’s Wearhouse and Jos. A. Bank could wind up together for better or worse.
The courtship to combine the two men’s clothing companies has dragged on for months, with each chain having their offer to acquire the other rebuffed. And the saga to combine the two rivals took another turn on Monday when Men’s Wearhouse boosted its offer to acquire Jos. A. Bank to $1.61 billion.
While the companies continue to play hard-to-get, analysts say a combination is inevitable. It would enable both chains to cut costs and boost profits in an increasingly competitive market in which shoppers are scrutinizing their purchases more. But so far, executives have been unable to hammer out a deal despite interest on both sides.
“Anybody who follows corporate America can see that these two companies have to be joined,” said Belus Capital Advisors analyst Brian Sozzi. “They are specialty retailers in a price-competitive industry.”
The Men’s Wearhouse Inc. is now offering $57.50 per share for Jos. A. Bank, up from its prior offer of $55 per share, or $1.54 billion. Jos. A. Bank rejected the previous offer in late December, saying it was too low. Men’s Wearhouse said it is taking the bid directly to Jos. A. Bank Clothiers Inc. shareholders. It also plans to nominate two people to the Jos. A. Bank board.
“We are committed to this combination,” Men’s Wearhouse President and CEO Doug Ewert said in a statement.
Jos. A. Bank said in a statement that it is reviewing the offer and will make a recommendation for shareholders by Jan. 17. But the company said at the present time shareholders should take no action related to the tender offer.
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