JoS. A. Bank Confirms $2.3 Bln Proposal To Buy Men's Wearhouse

(RTTNews) - JoS. A. Bank Clothiers, Inc. (JOSB) Wednesday confirmed that it has made a non-binding proposal to acquire all of the outstanding shares of Men's Wearhouse, Inc. (MW) for $48 per share in cash, representing a total equity value of about $2.3 billion, in a negotiated transaction. The acquisition is expected to be immediately and significantly accretive to earnings.

The retailer said its announcement was in response to inquiries following news reports of discussions with Men's Wearhouse about a possible business combination. The transaction is expected to create a leading men's apparel and sportswear designer, manufacturer and retailer in the U.S.

According to the firm, the proposal represents a premium of about 42 percent to the closing price of Men's Wearhouse common stock on September 17, 2013, the day before Jos. A. Bank made the proposal to Men's Wearhouse in a telephone call. Robert Wildrick, chairman of the board of Jos. A. Bank, also sent a follow-up letter to Douglas Ewert, chief executive officer of Men's Wearhouse.

Men's Wearhouse is reviewing the proposal.

"We are hopeful that Men's Wearhouse's Board will accept our proposal. We believe Men's Wearhouse's shareholders would want their Board to explore with us the immediate and certain value they would receive in a transaction," said Wildrick.

Jos. A. Bank expects the transaction to be funded by a combination of cash on its balance sheet, new equity capital and debt financing. The new equity will be provided by San Francisco-based private equity investment firm Golden Gate Capital, which has over $12 billion of capital under management.

Goldman, Sachs & Co. and Financo, LLC are serving as financial advisors and Skadden, Arps, Slate, Meagher & Flom LLP and Guilfoil Petzall & Shoemake, L.L.C. are serving as legal advisors to Jos. A. Bank.

Earlier last month, Men's Wearhouse had reported 28 percent fall in second-quarter profit, hurt by one-time charges and an Easter related shift in quarterly tuxedo rental revenues. The company also cut its full-year earnings outlook.

In June end, Jos. A. Bank had announced that it seeks potential acquisitions to facilitate additional growth.

JOSB closed Tuesday's regular trading at $41.66 on the Nasdaq, while Men's Wearhouse ended at $35.24 on the NYSE.