Men's Wearhouse recently announced the review of a previously declined merger offer from Jos. A Bank Clothiers Inc. The Texas-based men's clothing retailer would also be reviewing a return of capital to shareholders plan, as confirmed by its majority shareholder Eminence Capital LLC last Tuesday.
The hedge fund based out of New York, currently the largest single shareholder in Men's Wearhouse with nearly 10% in equity interest, had called out the company to engage itself quickly with the competitor Jos A Bank after it had rejected a merger offer tendered by the latter last October.
In a letter penned by Eminence CEO Ricky Sandler sent to Jos A Bank's CEO Doug Ewert, Sandler confirmed that he was encouraged with the discussions exchanged in a telephone call done last Monday. He then confirmed that Men's Wearhouse would be reviewing all its strategic options, as well as a review of the return of a significant amount of capital to its shareholders.
Sandler said, "We also fully expect you and the board, given the explicit commitment to explore all options, to actively engage with Jos. A. Bank before their deadline of November 14, 2013."
After the letter was released, share prices of Men's Wearhouse jumped by as much as 4.5% to USD48 per share and had now settled at the USD47.26 per share mark.
Last October, Jos A Bank had tendered an offer to purchase Men's Wearhouse for nearly USD2.3 billion. The merger would have created a men's apparel giant with 1,700 stores, of which Men's Wearhouse had outright rejected the offer.
Just last month, Jos A Bank said it would reprice its offer to the clothing firm to USD48 per share if it would be allowed to review its books for due diligence purposes. Jos A Bank set a deadline of November 14 for a response and if no access was provided, Jos A Bank would drop the bid altogether.
A representative of Men's Wearhouse was not immediately available for comment.
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