Jos. A. Bank is increasing its “poison pill” defense against a hostile takeover as it gears up for a possible proxy fight with rival Men’s Wearhouse.
The retailer said Friday that its plan would go into effect if an investor amasses a 10 percent stake, rather than a 20 percent stake. That’s the same ownership threshold as Men’s Wearhouse’s shareholder-rights plan.
Such a plan typically allows existing shareholders to acquire more stock at a discounted rate to ward off the investor collecting a big stake.
The two companies have been circling each other for months.
In September, a few months after Men’s Wearhouse Inc. ousted its founder and chairman, George Zimmer, Jos. A. Bank Clothiers Inc. offered to buy its larger rival for $2.3 billion, or $48 per share. Men’s Wearhouse turned down that offer, and after Jos. A. Bank dropped the bid, Men’s Wearhouse turned the tables with its own bid, for $1.54 billion, or $55 per share.
Then, in late December, Jos. A. Bank rejected that takeover offer from Men’s Wearhouse, saying it was too low. Men’s Wearhouse responded by saying that it would “carefully consider all of our options to make this combination a reality.” That could include launching a proxy battle and nominating director candidates at Jos. A. Bank’s next annual meeting.
Jos. A. Bank has said that it will continue to look into acquisition opportunities that would create value for its shareholders.
Hampstead, Md.-based Jos. A. Bank sells men’s tailored and casual clothing and shoes. It’s known for ads that say consumers can buy one suit or sport coat and get three for free. Fremont, Calif.-based Men’s Wearhouse sells men’s clothing and suits through its namesake chain of stores, as well as Moores and the K&G retail chain. Recently, the company has been going after younger shoppers with suits with slimmer silhouettes.