Men's Wearhouse is turning the tables on its recent pursuer, offering to buy Jos. A. Bank for about $1.54 billion.
The offer comes less than two weeks after Jos. A. Bank withdrew a $2.3 billion bid for its rival.
Men's Wearhouse Inc. is offering $55 per share for Jos. A. Bank Clothiers Inc. That's a 9 percent premium to the company's $50.32 Monday closing price.
Jos. A. Bank had no immediate comment.
The combined company would have more than 1,700 stores, according to Men's Wearhouse.
Men's Wearhouse lead director Bill Sechrest said in a statement Tuesday that the Houston company's board reviewed its strategic options after Jos. A. Bank's buyout bid went public. Sechrest said acquiring Jos. A. Bank has "strategic logic" and could benefit its shareholders, workers and customers.
.Jos. A. Bank sells men's tailored and casual clothing, sportswear and footwear. While it targets 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. Recently, the company has been going after younger shoppers with suits featuring slimmer silhouettes. It's also trying to raise the average ticket price and announced in July that it's buying the upscale Joseph Abboud brand for about $97.5 million in cash.
The announcement by Men's Wearhouse comes after Jos. A. Bank dropped its $2.3 billion offer for its competitor on Nov. 15. The Hampstead, Md., company initially made an unsolicited offer of $48 per share for Men's Wearhouse in September. Men's Wearhouse rejected the bid in October, calling it "opportunistic" and "inadequate."
Men's Wearhouse said it wouldn't rebrand Jos. A. Bank or remodel any stores if a deal goes through.
It plans to finance the proposed buyout with cash and debt financing. In late October, Jos. A. Bank said that it would terminate its bid by Nov. 14 if there continued to be no discussions on the proposal. Jos. A. Bank had previously said it would be open to raising its offer if allowed to assess whether an increased bid is justified. But Men's Wearhouse wouldn't give the company access to nonpublic information.
Men's Wearhouse anticipates the transaction for Jos. A. Bank substantially would add to its earnings in the first year following the closing. It said the deal would still allow it to keep a quarterly dividend of 18 cents per share.
Jos. A. Bank has approximately 28 million outstanding shares, according to FactSet.
Shares of Men's Wearhouse rose $4.13, or 8.8 percent, to $51.20 in premarket tradingl. Jos. A. Bank's stock jumped $5.99, or 11.8 percent, to $56.59.
(The Associated Press contributed to this report)