Even though Jos. A. Bank (UNKNOWN:JOSB.DL) formally rejected the latest higher takeover offer by Men's Wearhouse (NYSE:TLRD) on Thursday, a breakthrough of sorts has been achieved as the men's clothier finally agreed to meet with its rival and hammer out an acceptable (presumably higher) price to complete the deal.

Source: Wikimedia Commons.

With a hearing scheduled for later this month to block Jos. A. Bank's bid to acquire outdoor clothing retailer Eddie Bauer, a move roundly seen as an effort to thwart Men's Wearhouse's advance while also prodding it to raise its bid -- a development that ended up happening last week -- and the big possibility the judge just might block the effort as simply a defensive move, the clothier may feel it's maneuvered itself into the best position possible. It can say it's working with its rival on a deal, and possibly secure even more money for shareholders, but if the deal falls through, it's got the Eddie Bauer deal to fall back on, negating Men's Wearhouse's claim that it's a sham offer.

All along Jos. A. Bank has said it would pursue other acquisitions if it's own attempt to acquire Men's Wearhouse fell through, which occurred when the men's suits rival refused to negotiate at all, but it was put on the defensive when Men's Wearhouse turned the tables and made a bid for it. Twice now Men's Wearhouse has raised the offer and each time Jos. A. Bank has said it wasn't enough, and then it unveiled its effort to take over Eddie Bauer.

On the surface, such a deal can make sense as it diversifies Bank's offerings away from just men's suits and into outdoor apparel as well as women's and children's clothing. Yet it's still hard to escape the belief that a tie-up with Men's Wearhouse would be the best option with real synergies between the two. 

Men's suits remains a strong market. Troubled department store chain J.C. Penney just reported earnings that counted on sales of men's clothing to push itself higher out of the morass it's found itself in. Similarly, Macy's also said last week that men's dress apparel and shoes were among its most important segments last quarter.

It's clear that no matter who's been on the receiving end of the takeover offer, the executive teams of both parties haven't wanted to give up their power base, yet Men's Wearhouse has made it clear that Jos. A. Bank CEO Robert Wildrick will be on the outs. But by getting Men's Wearhouse to up its offer twice now while still having the Eddie Bauer deal to use as leverage, Jos. A. Bank can now say it's willing to negotiate. Many already question the amount of money Men's Wearhouse is willing to pay to acquire its rival, and it might not want to go as high as Bank is pushing for. 

What had once been seen as a sure thing in getting done quickly turned to unlikely, but now seems back on track at least to reaching a rapprochement. Jos. A. Bank may finally be willing to deal, but whether Men's Wearhouse thinks its men's apparel rival is worth more than the $1.8 billion it's currently offering remains to be seen. Investors apparently think Men's Wearhouse might be willing to go a little higher anyway, having pushed its stock up almost 7% on Friday. Yet as we've seen before in this drama, things can turn quickly colder and the deal could be put on ice once more.