Men's Wearhouse To Evaluate Its Options On Jos. A. Bank Clothiers - Quick Facts

(RTTNews) - Men's Wearhouse (MW) on Friday issued a statement in response to today's announcement that Jos. A. Bank Clothiers Inc. (JOSB) has entered into a definitive agreement to acquire Eddie Bauer.

In light of Jos. A. Bank's decision not to engage in discussions with Men's Wearhouse about a combination, Men's Wearhouse said that it will evaluate its options with respect to Jos. A. Bank.

Earlier today, Jos. A. Bank Clothiers and Golden Gate Capital announced that Jos. A. Bank has entered into a definitive agreement with Everest Topco LLC, a portfolio company of Golden Gate, under which Jos. A. Bank will acquire Everest Holdings LLC or Everest, parent company of the Eddie Bauer brand.

Jos. A. Bank also announced that it will promptly commence an issuer tender offer to acquire up to 4.6 million of its common shares, or 16.4% of its outstanding shares, at a price of $65 per share, or an aggregate of up to $300 million. The issuer tender offer is conditioned on, and would close promptly following completion of, the Eddie Bauer acquisition.

The purchase price for Eddie Bauer consists of a combination of $564 million in cash and approximately 4.7 million new shares of common stock of Jos. A. Bank, issued to Everest Topco at $56 per share, a premium to the pre-announcement share price.

As per the terms of the Agreement, Jos. A. Bank will have the right to terminate its agreement to acquire Eddie Bauer in the event an unsolicited offer is made to acquire Jos. A. Bank that the Jos. A. Bank's Board determines would reasonably be expected to create greater value for Jos. A. Bank's shareholders than the Eddie Bauer transaction and issuer tender offer.

Upon the closing of the Eddie Bauer acquisition and issuer tender offer, Everest Topco will own approximately 16.6% of Jos. A. Bank's outstanding shares and will have the right to designate two directors on Jos. A. Bank's Board of Directors.

In Late January 2014, Men's Wearhouse had urged directors of Jos. A. Bank Clothiers to re-consider its $57.50 a share bid. The clothing retailer also expressed willingness to sweeten its offer if additional value was discovered during due diligence, as the acquisition battle between two firms continue.

Men's Wearhouse also formally submitted its notice to nominate two independent director candidates to the board of Jos. A. Bank at its 2014 annual meeting.

On January 6, Men's Wearhouse launched an hostile sweetened offer of $57.50 a share to acquire Jos. A. Bank in an all-cash deal valued at about $1.6 billion. The cash tender offer expires on March 28. The move came just over a month after Jos. A. Bank rejected Men's Wearhouse's initial $55.00 a share offer, and 45 days after Jos. A. Bank withdrew its acquisition offer for Men's Wearhouse.

The flurry of acquisition bids between Men's Wearhouse and Jos. A. Bank began about three months back.

Hampstead, Maryland-based Jos. A. Bank had initially on October 9 offered to acquire Men's Wearhouse for $48 a share in cash, which Men's Wearhouse immediately rejected, stating it significantly undervalues the company and its strong prospects for continued growth and value creation.

Jos. A. Bank withdrew its $2.3 billion all-cash offer for Men's Wearhouse in mid-November, saying the Men's Wearhouse board failed to engage in good faith negotiations by a November 14 deadline.

Men's Wearhouse then in late November made its initial counter offer to acquire Jos. A. Bank in an all-cash deal valued at about $1.2 billion, just ten days after Jos. A. Bank withdrew its offer for Men's Wearhouse.