Men's Wearhouse upped its offer to Jos. A. Bank to $63.50 a share from $57.50, originally proposed, Monday, two weeks after an $825 million Eddie Bauer and Jos. A. deal was announced.
Men's Wearhouse may raise the amount to $65 depending on how research and analysis it can do, and the success of the Eddie Bauer deal The New York Times reported.
"We urge the Jos. A. Bank Board of Directors to immediately engage in negotiations with Men's Wearhouse so we can capitalize on the opportunity we have to enter into a transaction that creates significant value for shareholders of both companies," Doug Ewert, Men's Wearhouse's president and chief executive, said in a statement The Times reported. "Our increased cash offer would provide Jos. A. Bank shareholders with a substantial premium and immediate and certain value, and we are prepared to further increase our offer price on the basis of limited due diligence," Ewert said in the statement The Times reported.
Jos. A. Bank is expected to decide whether to accept the new terms by March 12. Men's Wearhouse also reportedly submitted documents for a lawsuit in attempt to prevent the Jos. A. Bank Eddie Bauer acquisition from going through.
Men's Wearhouse rejected Jos. A. Bank's initial $2.3 billion bid to take over the struggling retailer in October.
The Men's Wearhouse board claims the bid underestimated the company's worth and did not take the shareholders best interests into account The Times reported.
Men's Wearhouse also said it had twice as many stores as Jos. A Bank, and experienced 13 consecutive quarters of growth in same store sales through its main locations, while Jos A. Bank's revenue decreased three consecutive quarters.
Jos A. Bank offered to pay $48 a share in cash for Men's Wearhouse, 36 percent above its closing price in 2013. The company also indicated it would use cash on hand, sell some of its stock, and increase debt to fund the deal.
The company also joined forces with buyout firm Golden Gate Capital, who was going to invest $250 million to finance the transaction. The Men's Wearhouse board claims the bid underestimated the company's worth and did not take the shareholders best interests into account The Times reported.
Jos A. Bank originally introduced the idea to merge with its competitor three months after Men's Wearhouse let its founder and chairman George Zimmer go following a power struggle over privatizing the company.
