Jos A Bank Clothiers launches $2.3 bn bid for Men's Wearhouse

US-based menswear retailer Jos A Bank Clothiers Inc, yesterday launched a $2.3-billion bid to buy its bigger rival Men's Wearhouse Inc.

Under the all-cash deal, Jos A Bank has offered to pay $48 per share, a 36-per cent premium to Tuesday's closing price of Men's Wearhouse and a 42-per cent premium to the stock's closing price on 17 September, the day before the deal was proposed.

Jos. A. Bank plans to fund the acquisition through a combination of cash, new equity capital and debt financing.

The new equity will be provided by private equity firm Golden Gate Capital, and Goldman Sachs has informed Jos. A. Bank that, subject to customary terms and conditions, it is highly confident that the debt financing can be obtained in the capital markets.

Jos. A. Bank said that its offer is subject to a number of conditions, including due diligence of Men's Wearhouse.

Founded in 1905 by Charles Bank, an immigrant from Lithuania, Jos A Bank is one of the nation's leading retailers of men's classically-styled tailored and casual clothing, sportswear, footwear and accessories.

The Maryland-based company sells its product line through 623 stores in 44 states and the District of Columbia, as well as through a nationally distributed catalog and an e-commerce website.

 "We are hopeful that Men's Wearhouse's Board will accept our proposal," said Robert Wildrick, chairman of Jos A Bank. "Our all-cash proposal would deliver a substantial premium to Men's Wearhouse shareholders and create, in our view, the leading men's apparel and sportswear designer, manufacturer and retailer in the US.''

Jos A Bank noted that the transaction would provide unique benefits to Men's Wearhouse's shareholders due to the significant overlap in the shareholder composition of the two companies. 

In addition to receiving a full cash premium for their Men's Wearhouse shares, Men's Wearhouse shareholders who are also shareholders of Jos A Bank would have the opportunity to participate in the value creation resulting from the combination.

Founded in 1973, Texas-based Men's Wearhouse is one of North America's largest specialty retailers of men's apparel with 1,239 stores and a market cap of about $1.68 billion.

It operates under its own name Men's Wearhouse, K&G Superstores - an off-price retail chain featuring discontinued items, Moores Clothing for Men - a Canadian chain of men's clothing stores, Twin Hill Corporate clothing and MW Cleaners in the Houston Area.