NEW YORK (AP) — Never say never.Just when itlooked like a potential combination of Men’s
Wearhouse and Jos. A. Bankwas dead in the water, the script has been flipped.Now it’s Men’sWearhouse
that is offering approximately $1.54 billion for its rival.Less than two weeks ago, Jos. A. Bank dropped
a $2.3 billion bid for itscompetitor. A combination could create a menswear powerhouse of morethan 1,700
outlets.The announcement that Men’s Wearhouse wasinterested in a possible deal came as a bit of a
surprise on Tuesday.The retailer had received an unsolicited offer of $48 per share fromJos. A. Bank
Clothiers Inc. in September. But it rejected that bid inOctober, calling it "opportunistic"
and inadequate."Jos. A. Bankwas still in the hunt back then though, saying it would be open
toraising its offer if allowed to assess whether an increased bid wasjustified. But Men’s Wearhouse
wouldn’t give the Hampstead, Md., companyaccess to nonpublic information, and Jos. A. Bank dropped its
bid onNov. 15.While Men’s Wearhouse publicly scoffed at Jos. A. Bank’soffer, the proposal clearly gave
it some food for thought. Lead directorBill Sechrest said in a statement Tuesday that the Houston
company’sboard decided to review its strategic options after Jos. A. Bank’sbuyout bid went public.In
addition, Men’s Wearhouse facedpressure from its biggest shareholder, Eminence Capital LLC. OnWednesday
Eminence urged Men’s Wearhouse to talk with Jos. A. Bank. Thehedge fund argued that a combination of the
two businesses would createvalue and increase the growth potential of Men’s Wearhouse. Eminenceowns 9.8
percent of Men’s Wearhouse’s stock.Men’s Wearhouse Inc.appears to have now come around to Eminence’s
view, with Sechreststating that the potential acquisition of Jos. A. Bank at $55 per sharehas
"strategic logic" and could benefit its shareholders, workers andcustomers. The per share
offer is a 9 percent premium to Jos. A. Bank’s$50.32 Monday closing price.Jos. A. Bank said Tuesday that
its board will evaluate the offer and respond "in due course."Thedecision by Men’s Wearhouse
to go from an acquisition target to thebidder is known in the investment world as the Pac-Man defense.
Thephrase comes from the famous video game, in which Pac-Man was able to gofrom being hunted by ghosts
to turning around and gobbling them up oncehe swallowed a power pellet.Men’s Wearhouse said Tuesday that
itis familiar with being the bidder, with prior acquisitions includingJoseph Abboud, After Hours and
Moores. The company said it wouldn’trebrand Jos. A. Bank or remodel any stores if a deal goes
through.Jos.A. Bank sells men’s tailored and casual clothing, sportswear andfootwear. While it targets a
more established male professional, it’sknown for generous promotions like buying one suit or sport coat
andgetting three for free.Men’s Wearhouse sells men’s sportswear andsuits through its namesake chain of
stores, as well as Moores and theK&G retail chain. Recently, the company has been going after
youngershoppers with suits featuring slimmer silhouettes.The companyanticipates the transaction for Jos.
A. Bank, which it plans to financewith cash and debt financing, would substantially add to its earnings
inthe first year following the closing. It said the deal would stillallow it to keep a quarterly
dividend of 18 cents per share.Sharesof Men’s Wearhouse rose $3.57, or 7.6 percent, to $50.64 in
middaytrading. Jos. A. Bank’s stock jumped $4.90, or 9.7 percent, to $55.50.Copyright 2013 The
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