A bid of $1.8 billion suits Jos A Bank just fine
By ANNE DíINNOCENZIO
and MICHELLE CHAPMAN
the associated press | March 12,2014
NEW YORK ó Looks like the best suitor won.
After an extended chase that included overtures on both sides and flirtations with other parties, Menís Wearhouse and Jos. A. Bank will combine to create the nationís fourth-largest menswear retail chain.
Menís Wearhouse Inc. said Tuesday that itís buying its rival Jos. A. Bank Clothiers Inc. for $1.8 billion. The company will pay $65 a share, a 5 percent premium to Jos. A. Bankís Monday closing price of $61.83. Jos. A. Bank also said itís terminating its deal to acquire the parent company of Eddie Bauer, which sells rugged outerwear.
On Tuesday, shares of both companies rose on the news: Menís Wearhouseís stock was up nearly 5 percent to $57.14, while shares of Jos. A. Bank increased nearly 4 percent to $64.22.
The acquisition comes after months of the two chains publicly fighting over who would acquire whom. Industry watchers had speculated that a merger was inevitable given the challenges the companies face in the competitive menswear landscape. With more than 1,700 U.S. stores and $3.5 billion in annual sales, the combined companyís reach in menís clothing will fall behind only Macyís, Kohlís and J.C. Penney.
ďTogether, Menís Wearhouse and Jos. A. Bank will have increased scale and breadth,Ē Doug Ewert, CEO of Menís Wearhouse, said in a statement.
Jos. A. Bank made the first move in October when it offered to buy its larger rival for $2.3 billion. Menís Wearhouse shot down that offer, and turned the tables, offering to buy its rival for $1.54 billion. But after Jos. A. Bank turned down that bid, Menís Wearhouse increased its offer to $1.6 billion, and then again to $1.78 billion.
In the middle of the back-and forth, Jos. A. Bank said last month that it was buying Everest Holdings LLC, the parent company of Eddie Bauer. But the company left the door open for a deal with Menís Wearhouse by saying if it received a superior acquisition offer, it would pay a termination fee to end the Eddie Bauer deal.
By early March, Menís Wearhouse had an offer of $63.50 a share on the table but said it may raise the bid to $65 a share if some conditions were met.