Credit: Shutterstock photoShares of men's apparel retailer, The Men's Wearhouse Inc. ( MW ) 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.
Shares gained momentum from the latest news of Jos. A Bank Clothiers Inc 's ( JOSB ) 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 approximately 792.8K.
Apart from Men's Wearhouse, CBS Corporation ( CBS ) and The Home Depot, Inc. ( HD ) also reached their respective 52-week high of $67.47 and $83.10 on Feb 28, 2014.
CBS CORP (CBS): Free Stock Analysis Report
HOME DEPOT (HD): Free Stock Analysis Report
MENS WEARHOUSE (MW): Free Stock Analysis Report
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
