Jos. A. Bank Clothiers, Inc.: The Men’s Wearhouse Bid
(7 pages of text)
Jos. A. Bank Clothiers, Inc. (Jos. A. Bank), a men’s apparel retail chain, made a bid to acquire its industry rival, the Men’s Wearhouse. The Men’s Wearhouse not only rebuffed the bid but turned around and made a counter bid to acquire Jos. A. Bank. Initially, Jos. A. Bank merely rejected the offer as inadequate but subsequently made an offer to buy Eddie Bauer, a chain selling outdoor apparel, to make itself an unattractive target for the Men’s Wearhouse. Surrounding this takeover drama were a host of other actors, including Beacon Light Capital, a hedge fund that called for significant governance changes at Jos. A. Bank, and a second hedge fund, Eminence Capital, that owned stock in both Jos. A. Bank and the Men’s Wearhouse, and had filed a lawsuit against Jos. A. Bank to push for the deal to go through. The chairman of Jos. A. Bank’s board was faced with a critical decision regarding the acquisition offer from the Men’s Wearhouse and his own company’s offer to buy Eddie Bauer.
This case covers several key topics in the broad area of corporate governance including:
- The role of a company’s board as agents of stockholders.
- An examination of various internal measures (e.g., the role of the board and compensation practices) to guard against agency problems.
- The effectiveness of the market for corporate control as a governance mechanism.
- An identification and evaluation of the role played by activist investors.
United States, Large, 2014
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