RPR&C In The Media


MarketWatch – Jos. A. Bank’s deal with Men’s Wearhouse is one for the history books – quote by Jerry Reisman

March 11, 2014 Posted in: RPR&C In The Media


By Andria Cheng

The drama between Jos. A. Bank and Men’s Wearhouse has finally come to an end, with the former — the smaller of the two companies — securing an admirable $1.8 billion offer from the latter. The saga will be remembered in the retail sector record books, industry watchers said.

Both companies’ stocks reached record highs on Tuesday. For Men’s Wearhouse, investors were excited about the cost synergy, cross-merchandising and other growth opportunities that are expected to make Men’s Wearhouse a stronger No. 4 player in the U.S. men’s apparel space.

Jos. A. Bank’s maneuvering is being called a brilliant move. Let’s recap: the company launched its initial bid in October, which Men’s Wearhouse rejected and then countered with its own offers. Each party launched its own poison pill, and Jos. A. Bank agreed to buy Eddie Bauer to up the game — an “amazing” piece of boardroom maneuvering, analysts said.

Men’s Wearhouse’s final $65 per-share offer marked a 56% premium over Jos. A. Bank’s closing price on Oct. 8, a day before it first made a move on its larger rival.

“This has been, assuming everything stays on track, a master class example of how to maximize value for your shareholders,” Customer Growth Partners President Craig Johnson told MarketWatch, adding the premium was far richer than the 30% premium Saks got in its sales to Hudson’s Bay Co. in a high profile recent acquisition. “I can’t think, within retail, of a similarly well-choreographed value-creation waltz like we’ve seen here.”

In his over 40 years as a mergers and acquisition lawyer, Jerry Reisman, a partner at Garden City, New York-based law firm Reisman, Peirez, Reisman and Capobianco, said the deal marked an unusual example of a successful ‘Pac Man’ defense engineered by Men’s Wearhouse.

“Each one was strategically moving to take steps to block the other,” he said in an interview. “A Pac Man defense is unusual. Ultimately Men’s Wearhouse succeeded. Jos. A. Bank (also) got a fantastic offer. I’d give them a 10 for what they accomplished. They did well for Jos. A. Bank shareholders. They might have reached this price long term on their own, but not in the short term. Men’s Wearhouse paid a top price.”

So who is the biggest winner in this deal?

That would be hedge fund Eminence Capital. As Men’s Wearhouse’s largest shareholder with a nearly 10% stake, it also is the fourth largest shareholder of Jos. A. Bank, with a 4.9% stake.