The Men's Wearhouse offered to buy Jos. A. Bank Clothiers Tuesday, turning the tables on an apparel retailing rival that has been trying to take it over.
The Men's Wearhouse proposed to acquire Jos. A. Bank for $55 per share in cash, representing an implied enterprise value of approximately $1.2 billion.
The Men's Wearhouse said its takeover offer is a 32% premium over Jos. A. Bank's closing share price on Oct. 8, 2013, the day before Jos. A. Bank proposed to buy Men's Wearhouse.
Jos. A. Bank shares jumped 11% to $56.32 in pre-market trading Tuesday. Men's Wearhouse shares climbed 8% to $50.90.
"We are the right acquiror for this combination and that our experienced management team is best positioned to execute the integration of our companies and achieve the synergies that would result," said Bill Sechrest, lead director of the board of Men's Wearhouse.
A combination of the two companies would create the fourth largest U.S. men's apparel retailer, with more than 1,700 total stores and annual sales of more than $3.5 billion, Men's Wearhouse said.
The company forecast that the combination would create about $100 million to $150 million of annual synergies over three years through more efficient purchasing, customer service and marketing, and streamlining corporate functions. The deal will add to Men's Wearhouse's earnings in the first year following closing, it added.
Men's Wearhouse said it plans to pay for the deal with existing cash from its balance sheet and borrowed money.
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