Wednesday, February 12, 2014
Since Men's Wearhouse announced its tender offer for Joseph A. Bank, that deal -- for a while a deal that seemed like it would be a lot of fun to watch play out -- has basically fallen off the radar. Increasingly, it's looking like it might not happen afterall. Men's Wearhouse will probably be okay with that outcome, as will a now cowed JOSB board who stirred this whole hornet's next to begin with.
Why don't I think it's going to happen? Three things. First, Men's Wearhouse has already announced that it has no plans to extend the tender offer beyond the March 28 date. So, the tender offer gets done between now and then or it doesn't happen at all.
Second, according to a letter from JOSB to MW, the FTC has issued a second request. In th eHSR premerger notification process, the second request is a big deal and can be a deal stopper -- or at least tie the parties down for a long time as they work out the antitrust concerns of the federal government. In this case, you can imagine that in their initial HSR filing that JOSB filled it with as much evidence of the anticompetitive effects of the transaction as possible -- remember this is a trasnaction that JOSB initially wanted and extolled. Now, that they are on the sell side, well, suddenly it doesn't look so good ... for consumers!
No doubt that the second request will drag this deal well past March 28. Unless Men's Wearhouse extends its tender offer, the transaction may just be dieing a slow death.
Couple with both of those news that JOSB looking for a deal with Eddie Bauer. It's not a white knight strategy by any stretch. What they appear to be doing is setting up a Time defense to any potential litigation -- 'we are pursuing our own strategy, no need for us to deviate from it to let you acquire us.' Sure. Given the recent history of this transaction, I suppose you can say that with a straight face if you practice long enough.