Men’s Wearhouse prepared to boost offer for Jos. A. Bank

In the latest move in a months-long takeover battle, Men’s Wearhouse said Thursday it was willing to raise its bid to acquire rival Jos. A. Bank.

Men’s Wearhouse, which previously offered $57.50 a share, said in a letter to the Jos. A. Bank board of directors that it was “prepared to increase [its] offer price if you can demonstrate or we can discover additional value through discussions or limited due diligence.”

The two menswear retailers have been engaged in efforts to aquire each other since October, when Jos. A. Bank offered to buy Men’s Wearhouse for $2.3 billion. That offer was rejected by Men’s Wearhouse executives who said the bid undervalued the company.

Less than two months later, Men’s Wearhouse turned the tables and made an offer to acquire Jos. A. Bank.

The latest move, an expert said, was an effort to entice Jos. A. Bank back to the bargaining table.

“By law, Bank has to consider any reasonable offer, but its board is free to reject any offer as inadequate,” said Anthony Michael Sabino, a professor at the Peter J. Tobin College of Business at St. John’s University. “That’s their leverage to force Men’s Wearhouse to increase any bid until JAB hears a number it likes. Put another way, today’s events constitute the ‘friendly bear hug,’ as in getting close and hugging you until you give in.”

Sabino cautioned, however, that the offer could turn into a “hostile bid” given “the stubbornness of each of the respective clothiers.”

A spokesman for Jos. A. Bank declined to comment.

Men’s Wearhouse shares were down 20 cents, or 0.5%, to $45.89 in midsession trading Thursday. Meanwhile, shares of Jos. A. Bank were up 33 cents, or 0.6%, to $55.19.