Men's Wearhouse Inc. is upping its bid to buy competitor Jos. A. Bank Clothiers, offering to pay some $1.6 billion for the men's apparel retailer.
The two companies have been trading acquisition attempts, sparked by Jos. A. Bank's unsolicited move on Oct. 9 to purchase the much larger Men's Wearhouse for $48 a share, or roughly $2.3 billion.
On Monday, Men's Wearhouse said it commenced a cash tender offer of $57.50 a share — a 38% premium over Jos. A. Bank's close on Oct. 8. Compared with Jos. A. Bank's Friday close of $54.41 a share, it's a 5.7% premium.
"Although we have made clear our strong preference to work collaboratively with Jos. A. Bank to realize the benefits of this transaction, we are committed to this combination and, accordingly, we are taking our offer directly to shareholders," said Men's Wearhouse Chief Executive Doug Ewert in a statement.
Ewert was a protégée of Men's Wearhouse founder George Zimmer, who was ousted from his executive chairman post at the company this past summer.
Men's Wearhouse's bid Monday expands on its previous proposal to buy Jos. A. Bank for $55 a share, or $1.5 billion. Jos. A. Bank rejected the overture last month and then revised its shareholder rights plan, limiting potential buyers' stock ownership to 10% from 20%.
The strategy, often known as a poison pill, is designed to shield the Hampstead, Md., company against a hostile takeover.
Men's Wearhouse, which operates from Fremont, Calif., and Houston, said its tender offer expires March 28 unless it is extended.
The company said it will also nominate two independent director candidates to Jos. A. Bank's board during Jos. A. Bank's annual meeting.
One hopeful, John D. Bowling, was previously chief executive of Miller Brewing Co. as well as a veteran of Kraft Foods. The other, Arthur E. Reiner, is a Macy's alum.
In late-morning trading in New York on Monday, Jos. A. Bank was up more than 4%, or $2.39 a share, to $56.80. Men's Wearhouse was up nearly 3%, or $1.49 a share, to $52.08.