Just over a week ago, Hampstead, Maryland-based Jos. A. Bank had dropped its USD 2.3 billion takeover bid after it failed to tempt Men’s Wearhouse into merger negotiations.
Houston-based Men’s Wearhouse has now proposed to acquire all of the outstanding shares of Jos. A. Bank common stock for USD 55 per share in cash, representing a 45 per cent premium over Jos. A. Bank's unaffected enterprise value and a 32 per cent premium over Jos. A. Bank's closing share price on October 8, 2013, the day prior to the public announcement of Jos. A. Bank's proposal to acquire Men's Wearhouse.
As per Men’s Wearhouse’s media release, the transaction represents a 9.1x enterprise value to last twelve months Adjusted EBITDA multiple, a significant premium to Jos. A. Bank's proposal to acquire Men's Wearhouse. Men's Wearhouse intends to finance the transaction with a combination of balance sheet cash and debt financing.
The counter-bid from Men’s Wearhouse is recognition of the fact that two companies are interested in merger. The only question is whose acquisition proposal is better and more importantly, which management team should be in charge of the merged entity.
Commenting on the bid, Bill Sechrest, Lead Director of the Board of Men's Wearhouse said, “We believe 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. We are ready to engage with the Jos. A. Bank's Board immediately."
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