NEW YORK – Looks like the best suitor won.
After an extended chase that included overtures on both sides and flirtations with other parties, Men’s Wearhouse and Jos. A. Bank will combine to create the nation’s fourth-largest menswear retail chain.
Men’s Wearhouse Inc. said Tuesday that it’s 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. Bank’s Monday closing price of $61.83. Jos. A. Bank also said it’s terminating its deal to acquire the parent company of Eddie Bauer, which sells rugged outerwear.
Men’s Wearhouse and Jos. A. Bank have retail operations in Fort Wayne.
On Tuesday, shares of both companies rose on the news: Men’s Wearhouse’s 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 company’s reach in men’s clothing will fall behind only Macy’s, Kohl’s and J.C. Penney.
Together, Men’s Wearhouse and Jos. A. Bank will have increased scale and breadth, said Doug Ewert, CEO of Men’s Wearhouse.
Jos. A. Bank made the first move in October when it offered to buy its larger rival for $2.3 billion. Men’s Wearhouse shot down that offer and turned the tables, offering to buy its rival for $1.54 billion. After Jos. A. Bank turned down that bid, Men’s Wearhouse increased its offer to $1.6 billion, then to $1.78 billion.
In the middle of the back-and-forth bidding, 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 Men’s 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, Men’s Wearhouse said it may raise the bid to $65 a share if some conditions were met. Days later, the companies announced they were exchanging certain confidential information with each other.