Men's Wearhouse and Jos. A. Bank (NASDAQ: JOSB) are finally making progress towards a possible merger. Men's Wearhouse (NYSE: MW) on Monday announced that it has entered into a non-disclosure agreement with its smaller rival, under which the companies will exchange confidential financial data and hold talks on a possible deal. The company also said Jos. A. Bank has handed over a draft merger agreement.
Last week, Jos. A. Bank rejected a third bid from Men's Wearhouse but said it would be open to a higher offer. Men's Wearhouse said it was prepared to raise its offer for Jos. A. Bank to $65 a share, from $63.50, if the discussions reveal that a higher price is warranted. Men's Wearhouse's current bid expires on March 12 unless an offer is extended.
Jos. A. Bank began the tug-of-war with a hostile bid to acquire Men's Wearhouse back in September. The offer was swiftly rejected, and in a surprise move, Men's Wearhouse turned the tables and began its own acquisition efforts. Men's Wearhouse has 1,200 stores versus Jos. A. Bank's 600.
The merger talks became even more complicated when Jos. A. Bank agreed to buy retail chain Eddie Bauer for $825 million. Men's Wearhouse filed a lawsuit to block the Eddie Bauer deal, claiming it was a defensive tactic to block its own acquisition talks.
-See this Men's Wearhouse press release
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