Offit Kurman M&A Attorney Robert Bartlett Comments in The Daily Record on JoS. A Bank Merger

The Men’s Wearhouse announced Monday that it had entered into a nondisclosure agreement with Hampstead-based Bank, under which the two companies will exchange information to evaluate a potential merger.

The Men’s Wearhouse said that a deal is not guaranteed, but the agreement appears to signal a shift to cooperation.

“It’s highly unlikely that a deal doesn’t come through,” said Karyl Leggio, mergers and acquisitions expert and dean of the Sellinger School of Business at Loyola University Maryland.

On Thursday, Bank rejected Men’s Wearhouse’s most recent offer of $63.50 per share. However, the board of directors, in its letter of rejection, offered the Wearhouse a meeting to discuss a possible higher offer and the processes that would allow that.

Leggio expects that Men’s Wearhouse will offer more than $65, but no more than $70 per share. But it’s not just the value of the company that the Wearhouse is looking into, she said.

“There’s all kinds of things going on behind the scenes that we don’t know about,” said Leggio. Among the issues she identified: plans for the leadership if the two companies merge, what should be done with the brand and how the selection of a headquarters should be handled.

These are the considerations that the Wearhouse is researching in its examination of Bank, said Robert Barlett, a mergers and acquisitions attorney in the Bethesda office of Offit Kurman, Attorneys at Law.

“Because this is a public company, there’s a lot less potential of Men’s Wearhouse lifting up rocks and finding things that scare them,” Barlett said.

“It would take something really drastic I think to derail this deal. … It would take something just explosive.”

As for the proposed deal with Eddie Bauer — Bank announced its intention to acquire that company last month — Barlett predicted it will likely fall by the wayside.

“I think everyone who’s been watching this, everyone sort of agreed that this is a defensive move,” said Barlett.

Leggio agreed, adding that the Eddie Bauer announcement was a method of communicating Jos. A. Bank’s demands in a combination deal.

By leaving open the opportunity to drop Bauer, Bank made clear that it was still open to other deals, she said. And by announcing a buyback at $65 per share, it communicated its own standard for a minimum offer.

“When Jos. A. Bank announced that they were going to acquire Eddie Bauer, that was a pretty aggressive stance to remain independent,” said Leggio. But “they’re sending messages through this activity.”

Likewise, lawsuits brought by Men’s Wearhouse and shareholder Eminence Capital LLC against Bank were also meant to send a message, she said — more so than to yield a legal consequence.

Jos. A. Bank’s stock closed at $62.31 Monday, up 0.37 percent. The Men’s Wearhouse closed at $54.10, up 0.58 percent.

About Offit Kurman Attorneys at Law: Mergers and Acquisitions (M&A) Practice Group

At Offit Kurman Attorneys at Law, the lawyers in our Mergers and Acquisitions (M&A) Practice Group have earned a strong reputation for handling the gamut of business combinations and sale transactions regularly faced by private enterprises with skill, expertise, and efficiency. We regularly represent mid-market companies in deals of varying size and complexity. Our comprehensive services include the sale, purchase, restructuring and consolidation of business entities and divisions, management buy-outs, exit and succession planning and joint venture transactions.

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