Men's Wearhouse has entered into a non-disclosure agreement with US men's apparel and footwear business Jos A Bank Clothiers under which they could discuss a potential merger.

Following rejection by Jos A Bank of its improved offer last week, Men's Wearhouse said the two companies have agreed to "work in good faith to evaluate a potential combination". The company added that it has received a draft merger agreement from Jos A Bank.

Men's Wearhouse says its existing cash tender offer for $63.50 would provide Jos A Bank shareholders with a "substantial premium and immediate value", and that it is prepared to increase its offer price to $65 per share "if Jos A Bank can demonstrate or Men's Wearhouse can discover additional value through discussions or limited due diligence".

Click here for background on the story and here for insight into the ongoing battle between the two firms.