Retail

Men's Wearhouse Seals Deal for Jos. A. Bank

Men's Clothing
Source: Thinkstock
In a saga going back to last autumn, Men’s Wearhouse Inc. (NYSE: MW) announced Tuesday morning that it has entered a definitive agreement to acquire Jos. A. Bank Clothiers Inc. (NASDAQ: JOSB) in an all-cash deal for $65.00 a share, or total consideration of $1.8 billion. The final price is $1.50 per share more than Men’s Wearhouse offered in late February.

The story began last October when the smaller Jos. A. Bank offered to acquire Men’s Wearhouse for $48 a share, an offer that was rejected and soon withdrawn. Then Men’s Wearhouse offered $55 a share to acquire Jos. A. Bank. As part of that offer, Men’s Wearhouse said that it “expect[ed] a smooth integration as there will be no rebranding or remodels required — Jos. A. Bank’s store banner will remain in place. Management will consist of the most qualified individuals from both companies.”

In the final deal, Men’s Wearhouse kept its bargain, saying there will be no re-branding and that management “will consist of the most qualified individuals from both companies.” The combined stores will have more than 1,700 locations and pro forma revenue of about $3.5 billion.

Men’s Wearhouse’s offer represents a premium of 56% to Jos. A. Bank’s closing price when the smaller store first made its offer for Men’s Wearhouse. Jos. A. Bank has terminated its agreement to acquire Eddie Bauer as a condition of the merger, which could result in a claim from Bauer’s owner, Everest Holdings. Jos. A. Bank also terminated its previously announced tender offer to purchase up to $300 million worth of its outstanding stock.

The Men’s Wearhouse tender offer to Jos. A. Bank stockholders has been extended to a new expiration date of March 19, and the cash paid per share has been raised from $63.50 to $65.00. The merger is expected to close in the third quarter of this year, pending required regulatory approvals.

Men’s Wearhouse stock was up about 5.6% at $57.54, after posting a new 52-week high of $58.80 earlier in the morning. The 52-week low is $28.95.

Jos. A. Bank shares were up about 3.8% to $64.15, after posting a new high of $64.63. The 52-week low is $38.36.

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