Anatomy Of A Merger War: Men’s Wearhouse Vs. Jos. A. Bank

February 7, 2014 – In The News

Ted D. Rosen was quoted in the Law360 article “Anatomy Of A Merger War: Men’s Wearhouse Vs. Jos. A. Bank.” While the full text can be found in the February 7, 2014, issue of Law360, a synopsis is noted below.

There has been a merger fight between rival menswear retailers Men’s Wearhouse Inc. and Jos. A. Bank Clothiers Inc. for several months.

As the contest drags on and heats up, analysts, shareholders and practitioners wonder if, how and when the popular menswear retailers could find common ground and strike a deal, one that would give way to an industry powerhouse with broader reach and bigger revenues.

“The problem [Men’s Wearhouse has] in rejecting the initial offer from Jos. A. Bank is that they made their own arguments against the transaction,” said Rosen. “That makes it an uphill battle.”

Speculation that Jos. A. Bank has shifted its focus to Eddie Bauer has kicked up recently, adding another layer to the story.

“The Eddie Bauer acquisition makes a lot more strategic sense,” Rosen said. “If that’s the case, it’s going to be very difficult for Men’s Wearhouse and Eminence to have a court set aside or delay or prohibit a transaction that’s in the best interest of the stockholders in the long run.”

Aside from uncertainty over whether the companies can agree to terms, there looms a bigger question over whether a deal could ever make sense behind closed doors. Integration between two newly merged companies – always an important piece of the deal – takes on a unique significance in the retail sector, said Rosen, who has built his practice around retail M&A transactions.

“It seems pretty clear at this point that the boards of both companies are not on the same page. That they couldn’t get a deal done is evidence of that fact,” Rosen said. “That doesn’t bode well for the success of an acquisition for either side.”