The retailer tried in vain for weeks to get the much larger Men’s Wearhouse to consider its unsolicited $55-a-share buyout offer and finally dropped the effort Nov. 14 after getting no response. Jos. A. Bank, however, left the door open for a deal, saying it would reconsider making a new offer if warranted.
By most accounts, Jos A. Bank didn’t expect Men’s Wearhouse to return with a buyout offer of its own, offering much less, $48 a share, for its rival.
Bill Sechrest, lead board director of Men’s Wearhouse, said his company has the management and experience to make the combined company a success.
“After a thorough review, our board concluded that an acquisition of Jos. A. Bank by Men’s Wearhouse has strategic logic and the potential to deliver substantial benefits to our respective shareholders, employees and customers,” Sechrest said in a statement. He added they are “ready to engage” with the Jos. A. Bank board immediately.
Investors certainly seemed to like the idea of combining the companies. In trading Tuesday, shares of both companies were up more than 12 percent at one point from the previous day’s close before giving back some of the gains.
Both retail chains have multiple locations in metro Atlanta, where both also advertise heavily. Hampstead, Md.-based Jos. A. Bank has 629 stores in 44 states and the District of Columbia. Houston-based Men’s Wearhouse has more than 1,100 locations. It owns K&G stores, another men’s clothing chain, and acquisitions have included Joseph Abboud menswear and After Hours formal wear.
Men’s Wearhouse, which would fund the deal with cash and debt, said the combined company would have more than 1,700 stores and sales exceeding $3.5 billion.