HAMPSTEAD, MD. (AP) - Jos. A. Bank Clothiers has proposed to buy rival retailer Men's Wearhouse in a $2.3 billion acquisition that would pair two retailers dealing with slumping earnings.
HAMPSTEAD, MD. (AP) — Jos. A. Bank Clothiers has proposed to buy rival retailer Men's Wearhouse in a $2.3 billion acquisition that would pair two retailers dealing with slumping earnings.
The Hampstead, Md., company said Wednesday it has offered to pay $48 in cash for each share of Men's Wearhouse.
That is a 42 percent premium to the stock's closing price on Sept. 17, the day before Jos. A. Bank. Privately pitched the deal to Men's Wearhouse executives in a phone call and follow-up letter.
The Men's Wearhouse Inc. shares climbed more than 34 percent, or $12.15, to $47.39 in premarket trading Wednesday. Jos. A. Bank shares also are up 12 percent, or $4.99, to $46.65.
Jos. A. Bank said Men's Wearhouse is reviewing its offer. Representatives of the Houston-based Men's Wearhouse did not immediately return calls from The Associated Press seeking comment.
In June, Men's Wearhouse ousted its chairman George Zimmer — who had also served as the company's pitchman — following a dispute over the direction for the company. Zimmer, who founded the company in 1973, used to appear in many of its TV commercials with the slogan, "You're going to like the way you look. I guarantee it."
Jos. A. Bank had said in June that it was considering acquisitions and it was storing up capital for a possible deal. The company then said last month its fiscal second-quarter net income fell 39 percent as shoppers didn't respond as well to some of the retailer's marketing campaigns as they did a year ago.
The company sells men's tailored and casual clothing, sportswear and footwear and operates 623 stores in 44 states and the District of Columbia.
Men's Wearhouse sells men's clothing through its namesake chain of stores, as well as the Moores and K&G retail chains. It runs more than 1,200 stores.
It reported last month that its fiscal second-quarter earnings fell 28 percent, hurt by one-time charges and an early Easter that pushed prom tuxedo rentals earlier than usual. The men's clothing retailer also cut its full-year guidance.