THE SUIT WARS MEN’S WEARHOUSE VERSUS JOS. A. BANK.

THE SUIT WARS MEN’S WEARHOUSE VERSUS JOS. A. BANK
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Introduction
Men’s Wearhouse was the first to sell polyester sport coats and slacks in Houston. The store grew to become among the most massive stores selling and men's suits and providing tuxedo rentals in Canada and the United States of America. Jos A. Bank Clothier Incorporation was also a company that dealt in clothing initially dealing in both women's clothing and sportswear. The firm also had a variety of men’s casual and tailored clothing, accessories, and footwear. Eminence Capital was the synergy between the two firms since it was the major shareholder in both firms. A perfect solution that would address the industry's struggle to attract customers would have been an advantage if the two firms were to merge. The kind of synergies and their magnitude, reasons for rejecting the merger, actions of Eminence Capital are discussed in this paper.
The Kind of Synergies and their Magnitude
The corporation between Jos A. Bank and Men’s Wearhouse would have provided an ideal solution for the industry's long spread struggle in attracting customers. The merger would create significant operational synergies with an increase in the store scale with over 1700 stores across North America. Besides, the combination of both stores would provide a compelling brand with great products at various price points. Jos. A. Bank would benefit from the sharp tuxedo renting business the Men's Wearhouse had since the suit renting business was difficult for Jos. A. Bank. The merger would have also provided Jos. A. Bank with branded merchandise. Men's Wearhouse, on the other hand, would benefit from the prominent omnichannel business of Jos. A. Bank. Therefore, the kind of synergies and the magnitude of the merger are outlined in the above paragraph.
Reasons for Rejecting the Merger
Men’s Wear house rejected the offer by Jos. A. Banks for the buyout because the offer, not only being inadequate, was also selfish. Men's Wearhouse rejected the bid by using poison pills, where an investor who bought more than 10 percent of the shares was offered a discount as an investor trigger point. As a result, the attractiveness of Men's Wearhouse to Jos. A. Bank reduced as the amount of money needed for the acquisition increased. Jos. A. Bank’s board of directors, after a thorough review, rejected the offer made by Men's Wearhouse because the price for each share in the merger was not favorable to the shareholders. Likewise, the Board of Directors voted to reject the merger because the price offered undervalued the company. The fear of the loss of power, jobs, perks, and other benefits prompted the board to reject any offers. In brief, the reasons for rejecting the bid was based on the fear one had of losing one's control over the firm.
Eminence Capital Reactions
Eminence Capital should urge the Men’s Wearhouse to engage in the takeover talks with Jos. A. Bank. Despite the price offer being low, the other reasons for rejecting the bid were reckless, misinformed, and disingenuous. Eminence advised that there should be a price to fairly compensate the shareholders of Men's Wearhouse paid by Jos. A. Bank. Eminence encouraged Men’s Wearhouse to adopt a new shareholder rights plan that allows an investor to acquire stock at a discount when one acquires 10 percent or more of the firm’s common shares in a transaction. Eminence Capital should plan a meeting where the board of directors of the Men’s Wearhouse would be held accountable. If the shareholders of the firm are not satisfied with the merger conditions, the board would have to be replaced. Consequently, the above actions should be implemented by Eminence Capital at this juncture....