Shares of men's apparel retailer,
The Men's Wearhouse Inc.
) achieved a 52-week high of $54.38 on the last trading day,
eventually closing at $53.79 per share, amassing a significant
return of 94.9% over the past one year.
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Shares gained momentum from the latest news of
Jos. A Bank Clothiers Inc
) acceptance to enter talks with Men's Wearhouse regarding its
proposal to raise its acquisition bid further following limited
due diligence, although the former rejected the latter's latest
bid of $63.50 per share.
In the letter sent to Men's Wearhouse on Feb 27, Jos. A. Bank
turned down the Men's Wearhouse's recently raised acquisition
offer stating it as inadequate. The company also stated that its
board, after thorough evaluation, believes that the Eddie Bauer
acquisition and the related issuer tender offer still holds good
for the company and is in the best interest of its shareholders.
Further, the company revealed that its deal to acquire Eddie
Bauer has received early consent from the Federal Trade
Commission to proceed with the deal.
In its meeting with Men's Wearhouse, Jos. A. Bank intends to
provide the limited due diligence as required by the former and
ascertain the highest price it will be willing to pay for the
long sought-after buyout. Additionally, Jos. A. Bank
expects to collect details regarding the proposed transaction
structure and estimated certainty of its completion with regards
to the Federal Trade Commission and other approvals.
Moreover, the company made clear that it will be restricting the
time provided to Men's Wearhouse for presenting its best offer as
it still believes that the Eddie Bauer deal holds more value.
Men's Wearhouse's raised offer values Jos. A. Bank at a 52%
premium over the latter's closing price on the day prior to the
announcement of Jos. A. Bank's proposal to buy Men's Wearhouse
(Oct 8, 2013) and a 60% premium to Jos. A. Bank's unaffected
enterprise value. It also represents a 9.7x enterprise value to
the trailing 12-month adjusted earnings before interest, taxes,
depreciation and amortization (EBITDA) multiple.
Men's Wearhouse, holding a Zacks Rank #4 (Sell), has a long-term
EPS growth rate is 3.5%, above the peer group average of 2.9%.
Average volume of shares traded over the last 3 months stands at
Apart from Men's Wearhouse,
The Home Depot, Inc.
) also reached their respective 52-week high of $67.47 and $83.10
on Feb 28, 2014.