Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of Jos. A. Bank Clothiers (NASDAQ: JOSB) and The Men's Wearhouse, Inc. (TLRD) were looking dapper today, each gaining as much as 12% after Men's Wearhouse made an offer to buy Jos. A. Bank.
So what: Today's news comes just weeks after Men's Wearhouse declined a buyout offer from the smaller Jos. A. Bank at a purchase price of $2.5 billion. Men's Wearhouse this morning turned around and said it was willing to pay $55 a share for Jos. A. Bank, a 9% premium over its closing price yesterday, or about $1.5 billion. Shares of the smaller men's clothing retailer actually went as high as $56.90, an indication that the market believed Men's Wearhouse could end up paying a higher price for the takeover. Among other arguments, Men's Wearhouse said that the acquisition would add value for shareholders and create the country's premier men's apparel retailer.
Now what: Activist investors had been pushing Men's Wearhouse to sell itself or merge with another company, and its retaliatory offer seems to confirm that some kind of combination is in the best interest of both companies. In a press release issued this morning, Jos. A. Bank said only that it had received the offer from Men's Wearhouse, and "would evaluate the proposal and respond in due course." Shares of both companies could continue to move higher on hopes for an eventual deal.
