One of the most notable and important trends in public M&A in 2013 has been the role of shareholder activists as drivers of M&A activity. Activist shareholders have influenced, prompted or disrupted several prominent M&A deals this year, including the Dell buyout, the Community Health Systems/Health Management Associates acquisition and the Office Depot/OfficeMax merger.

This week continued that trend with three new hostile situations emerging, each of which signals the possibility of a negotiated deal. But as this Update explains, some of those deals may be triggered by signals of deal-readiness that are uncommon in hostile settings.

In the highest-profile activity of the week, Jos. A. Bank Clothiers, Inc. announced on Wednesday that it had made an unsolicited bid to acquire all of the outstanding shares of The Men's Wearhouse, Inc. The announcement includes a copy of the letter containing the non-binding proposal that Jos. A. Bank sent to Men's Wearhouse on September 18. Some highlights of the proposal are:

Of note, the proposal is not exactly what practitioners call a bear hug letter, in the sense that it does not directly or even more subtly threaten to take the offer to Men's Wearhouse's shareholders if the board of Men's Wearhouse refuses to negotiate with Jos. A. Bank. Nevertheless, the act of publicizing the letter can be taken to mean just that.

On the same day Jos. A. Bank publicized the bid, Men's Wearhouse rejected it and refused to enter merger negotiations. The rejection highlights the proposal's contingency on due diligence, financing and antitrust approval, and criticizes the proposal as opportunistic, coming as it did when Men's Wearhouse stock price was at a low from which it has since rebounded.

Despite Men's Wearhouse's rejection, the stock prices of both companies rose considerably on Wednesday, indicating the market's opinion that a merger of the two companies would make sense. On Thursday, Jos. A. Bank responded that it will continue to pursue its proposal and called Men's Wearhouse's rejection of the offer "inexplicable."

In spite of its tougher tone, Jos. A. Bank had already expressed publicly that it is open to a creative solution to navigate around the impasse. In an interview with the Wall Street Journal published on Wednesday, the Chairman of the Board of Jos. A. Bank indicated that he would be open to an acquisition of Jos. A. Bank by Men's Wearhouse if the latter were to offer the same 42% premium that Jos. A. Bank had offered. Setting aside whether Men's Wearhouse would agree how Jos. A. Bank calculated the size of the premium, the act of expressing a willingness to be acquired by the target company is a highly unusual one for a hostile bidder.

In the shareholder-activist setting, Sotheby's announced on October 4 that it had adopted a shareholder rights plan, or poison pill. The plan was adopted in response to an accumulation of Sotheby's stock by Third Point LLC, which announced two days before that it had increased its stake to 9.3% of the shares of Sotheby's. The letter from Third Point to Sotheby's, written in the colorful style of Third Point's CEO Daniel Loeb, calls on the Chairman and CEO of Sotheby's to step down, for those two roles to be separated going forward, and for Sotheby's to add several directors of Third Point's choosing to the board.

The Sotheby's poison pill is triggered if a shareholder or group of shareholders acquires beneficial ownership of 10% of the company's stock, or of 20% if acquired by passive investors filing on Schedule 13G. The pill also features both flip-in and flip-over provisions. For a detailed description of the mechanics of poison pills, see Practice Note, Poison Pills: Defending Against Takeovers/Stockholder Activism and Protecting NOLs: Pill Mechanics and Shareholder Concerns.

Notably, the pill contains an exception for acquisition offers that pay the same per-share consideration for all the shares of the company and that result in the bidder owning a majority of the company's shares after 100 days. These "Qualifying Offers" do not trigger the poison pill. The exemption can be read as an implicit invitation by the board of Sotheby's to invite bids to acquire the entire company, which the board might view as favorable to a proxy contest.

Finally this week, according to a report in the Wall Street Journal, the hedge fund Barington Capital Group LP, along with other investors, has acquired a 2.8% stake in Darden Restaurants, Inc., the owner of Olive Garden, Red Lobster, The Capital Grille and other restaurant chains. The group is pushing for Darden Restaurants to form two separate companies, one of which would house the Olive Garden and Red Lobster chains, the other which would own Darden Restaurants' other, higher-growth chains.

Neither Darden Restaurants nor Barington Capital has made any filing regarding these talks, but Darden Restaurants did confirm to Reuters that it has spoken with Barington Capital.

Barington Capital's effort is reminiscent of a similar push from Trian Fund Management to seek a merger of PepsiCo and Mondelez International and then have the combined company spin off its beverage business. A successful effort by either of these shareholder activists could see their targets pursuing sales, mergers, spin-offs or some combination of all three.