UPDATE 2-Men's Wearhouse says has draft merger agreement from Jos. A. Bank
* Men's Wearhouse says entered into non-disclosure agreement with Jos. A. Bank
* Says cos agreed to exchange certain confidential information
* Says cos will work in good faith to evaluate potential combination
March 3 (Reuters) - Men's Wearhouse Inc said it was discussing a proposed merger with smaller rival Jos. A. Bank Clothiers Inc, after the two men's apparel retailers spent months bidding for each other.
The companies have entered a non-disclosure agreement to exchange some confidential information and to work in good faith to evaluate a potential combination, Men's Wearhouse said on Monday.
Men's Wearhouse also said it has received a draft merger agreement from Jos. A. Bank, but there was no assurance the discussions will lead to a transaction.
The companies, leaders in a mature market, have bid and counterbid for each other since October.
Jos. A. Bank rejected Men's Wearhouse's revised $1.78 billion takeover offer last week, but said it would be willing to discuss a higher bid.
Men's Wearhouse raised its cash tender offer to Jos. A. Bank shareholders to $63.50 per share from $57.50, and said it could increase the offer to $65 if it was allowed limited due diligence. Continued...