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A bid of $1.8 billion suits Jos A Bank just fine

KDWN

NEW YORK (AP) — 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.

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,” Doug Ewert, CEO of Men’s Wearhouse, said in a statement.

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. But after Jos. A. Bank turned down that bid, Men’s Wearhouse increased its offer to $1.6 billion, and then again to $1.78 billion.

In the middle of the back-and forth, 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 had an offer of $63.50 a share on the table but said it may raise the bid to $65 a share if some conditions were met. Then, a few days later, the companies announced they were exchanging certain confidential information with each other.

Despite the rough courting period, both companies say they expect a smooth integration. In a joint press release, they said shareholders of both companies will benefit from about $100 million to $150 million in savings realized over three years as the company streamlines its duplicative corporate functions and improves sourcing and merchandising.

“Our board has been rigorously focused on pursuing a path for our shareholders that maximizes value created,” said Robert N. Wildrick, chairman of Jos. A. Bank’s board. “The transaction we are announcing today clearly reflects the success of our efforts.”

A spokesman for Men’s Wearhouse declined to comment on any layoffs or management changes beyond what was in the joint press release: “Management will consist of the most qualified individuals from both organizations.”

Analysts say there’s a bright future for the combined company. The suit business, which generated $2.3 billion in revenue last year, has been relatively healthy. It’s been up 4 percent over the past three years, according to market research firm NPD Group, fueled in part by tight-fitting varieties that have attracted young males.

The companies also have complementary businesses. Men’s Wearhouse, which sells men’s sportswear and suits through its 1,200 stores at its Men’s Wearhouse, Moores and K&G chains, caters to young male customers looking for their first suit. Meanwhile, Jos. A. Banks focuses on a more established clientele that’s looking for a good deal at its 623 stores with promotions like “buy one suit or sport coat and get three free.”

Richard Jaffe, a Stifel Nicholaus analyst, said the acquisition means that both companies can lower costs, whether it’s buying shopping bags or buying TV ads. He also said each could borrow from the other’s expertise. He could see Jos. A. Bank selling tuxedos, for instance, or Men’s Wearhouse improving on its sportswear offerings.

“There are real cost savings and opportunities to turn around the business,” he said.

The transaction is expected to close by the third quarter.

Follow Anne D’Innocenzio at -http://www.Twitter.com/adinnocenzio

A bid of $1.8 billion suits Jos A Bank just fine

KDWN

NEW YORK (AP) — Looks like the best suitor won.

After an extended chase that included overtures on both sides, Men’s Wearhouse and Jos. A. Bank will combine to create the nation’s fourth largest seller of men’s wear.

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 most recent closing price. As part of the deal, Jos. A. Bank also said it’s terminating its deal to acquire the parent company of Eddie Bauer, which sells rugged outerwear.

Shares of both companies rose on the news: Men’s Wearhouse’s shares were up nearly 5 percent to $57.13, 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 increasingly competitive men’s wear 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,” Doug Ewert, president and CEO of Men’s Wearhouse, said in a statement.

Jos. A. Bank made the first move in October when it offered to buy its larger rival for $2.3 billion, just a few months after Men’s Wearhouse ousted its founder and chairman. Men’s Wearhouse shot down that offer, and turned the tables, offering to buy its rival for $1.54 billion. But after Jos. A. Bank turned down that bid, Men’s Wearhouse increased its offer to $1.6 billion, and then again to $1.78 billion.

In the middle of the back-and forth, Jos. A. Bank said last month that it was buying the parent of Eddie Bauer, but left the door open for a deal with Men’s Wearhouse. At the time, it said 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 had an offer of $63.50 per share on the table but said it may raise the bid to $65 per share if some conditions were met.

Despite, the rough courting period, both companies say they expect a smooth integration. In a joint press release, they said shareholders of both companies will benefit from about $100 million to $150 million in savings realized over three years as it streamlines its duplicative corporate function and improves its sourcing and merchandising. A spokesman for Men’s Wearhouse declined to comment on any layoffs or comment on management changes beyond what the release said: “management will consist of the most qualified individuals from both organizations. “

“Our board has been rigorously focused on pursuing a path for our shareholders that maximizes value created,” said Robert N. Wildrick, chairman of Jos. A. Bank’s board. “The transaction we are announcing today clearly reflects the success of our efforts.”

Analysts say there’s a bright future for the combined company. The suit business, which generated $2.3 billion in revenue last year, has been relatively healthy. The business has been up 4 percent over the past three years, after being flat or down since the recession, according to market research firm NPD Group. That has been fueled by tight-fitting suits that have attracted young males.

The companies also have complementary businesses. Men’s Wearhouse, which sells men’s sportswear and suits through its 1,200 stores at its Men’s Wearhouse, Moores and K&G chains, caters to young male customers looking for their first suit. Meanwhile Jos. A. Banks focuses on a more established clientele that’s looking for a good deal at its 623 stores with promotions like “buy one suit or sport coat and get three free.”

But the industry is still competitive, and to grab men’s shopping dollars, analysts say both chains have had to compete with fierce promotions.

Stifel Nicholaus analyst Richard Jaffe said that the acquisition means that both companies can lower costs, whether it’s buying shopping bags or buying TV ads. He also noted each could borrow their expertise. He could see Jos. A. Bank selling tuxedos, for instance, or Men’s Wearhouse improving on its sportswear offerings.

“There are real cost savings and opportunities to turn around the business,” he said.

The transaction is expected to close by the third quarter.

Follow Anne D’Innocenzio at -http://www.Twitter.com/adinnocenzio

A bid of $1.8 billion suits Jos A Bank just fine

KDWN

NEW YORK (AP) — The jacket finally fits: Men’s Wearhouse is buying rival Jos. A. Bank for $1.8 billion.

The agreement ends a months-long back and forth. The combined company will have more than 1,700 U.S. stores. And the Jos. A. Bank outlets will keep their name and possibly keep their “buy one suit and get three free” deals.

Men’s Wearhouse Inc. announced Tuesday that it will pay $65 per share, a 5 percent premium to Jos. A. Bank Clothiers Inc.’s most recent closing price.

Jos. A. Bank got the ball rolling in October when it offered to buy its larger rival for $2.3 billion. Men’s Wearhouse scoffed at that offer, and turned the tables, offering to buy its rival for $1.54 billion.

By early March, Men’s Wearhouse had an offer of $63.50 per share on the table but said it may raise the bid to $65 per share if some conditions were met.

Jos. A. Bank also said Tuesday that it was terminating its deal to acquire the parent company of Eddie Bauer, which sells rugged outerwear. That deal was announced on Feb. 14, but Jos. A. Bank left the door open. It said that if it received a superior acquisition offer, it would pay a termination fee to end the Eddie Bauer deal.

“Together, Men’s Wearhouse and Jos. A. Bank will have increased scale and breadth, and Jos. A. Bank’s strong brand and complementary business model will broaden our customer reach,” Doug Ewert, president and CEO of Men’s Wearhouse, said in a statement.

Both companies said that the deal would complement each other’s business models, and better serve an expanded customer base in more locations and improve its sourcing and merchandising capabilities.

They expect a smooth integration with no rebranding or remodeling required. Jos. A. Bank’s store banner will remain in place.

Jos. A. Bank, based in Hampstead, Md., sells men’s tailored and casual clothing, sportswear and operates 623 stores in 44 states and the District of Columbia. While it gears to a more established male professional, it’s known for generous promotions like buying one suit or sport coat and getting three for free.

Men’s Wearhouse sells men’s sportswear and suits through its namesake chain of stores, as well as the Moores and K&G retail chains. It runs more than 1,200 stores and is also in the tuxedo-rental business. Recently, it’s been going after younger shoppers with suits with slimmer silhouettes. It’s also trying to raise the average ticket price and announced in July that it’s buying upscale Joseph Abboud brand for about $97.5 million in cash.

The transaction is expected to close by the third quarter.

A bid of $1.8 billion suits Jos A Bank just fine

KDWN

NEW YORK (AP) — The jacket finally fits: Men’s Wearhouse is buying rival Jos. A. Bank for $1.8 billion.

The agreement ends a months-long back and forth. The combined company will have more than 1,700 U.S. stores. And the Jos. A. Bank outlets will keep their name and possibly keep their “buy one suit and get three free” deals.

Men’s Wearhouse Inc. announced Tuesday that it will pay $65 per share, a 5 percent premium to Jos. A. Bank Clothiers Inc.’s most recent closing price.

Jos. A. Bank got the ball rolling in October when it offered to buy its larger rival for $2.3 billion. Men’s Wearhouse scoffed at that offer, and turned the tables, offering to buy its rival for $1.54 billion.

By early March, Men’s Wearhouse had an offer of $63.50 per share on the table but said it may raise the bid to $65 per share if some conditions were met.

Jos. A. Bank also said Tuesday that it was terminating its deal to acquire the parent company of Eddie Bauer, which sells rugged outerwear. That deal was announced on Feb. 14, but Jos. A. Bank left the door open. It said that if it received a superior acquisition offer, it would pay a termination fee to end the Eddie Bauer deal.

“Together, Men’s Wearhouse and Jos. A. Bank will have increased scale and breadth, and Jos. A. Bank’s strong brand and complementary business model will broaden our customer reach,” Doug Ewert, president and CEO of Men’s Wearhouse, said in a statement.

Both companies said that the deal would complement each other’s business models, and better serve an expanded customer base in more locations and improve its sourcing and merchandising capabilities.

They expect a smooth integration with no rebranding or remodeling required. Jos. A. Bank’s store banner will remain in place.

Jos. A. Bank, based in Hampstead, Md., sells men’s tailored and casual clothing, sportswear and operates 623 stores in 44 states and the District of Columbia. While it gears to a more established male professional, it’s known for generous promotions like buying one suit or sport coat and getting three for free.

Men’s Wearhouse sells men’s sportswear and suits through its namesake chain of stores, as well as the Moores and K&G retail chains. It runs more than 1,200 stores and is also in the tuxedo-rental business. Recently, it’s been going after younger shoppers with suits with slimmer silhouettes. It’s also trying to raise the average ticket price and announced in July that it’s buying upscale Joseph Abboud brand for about $97.5 million in cash.

The transaction is expected to close by the third quarter.