Jos. A. Bank Clothiers Friday agreed to acquire retailer Eddie
Bauer for $825 million in cash and stock, the latest development in
its continuing takeover battle with Men's Wearhouse Inc.
Jos. A. Bank is offering Golden Gate $564 million in cash and
about 4.7 million new shares at $56 a share for Eddie Bauer.
The deal is expected to immediately add to Jos. A. Bank's
earnings, the company said. Jos. A. Bank said the deal would be
financed in part by borrowing from Goldman Sachs, which is also
serving as an adviser.
Jos. A. Bank also said it would buyback up to 4.6 million of its
common shares at $65 a share, or up to $300 million, if it
completes the Eddie Bauer purchase, offsetting the dilution from
the stock portion of the acquisition.
The Wall Street Journal reported earlier in February that Jos.
A. Bank was in talks with Eddie Bauer's owner, private-equity firm
Golden Gate Capital, to acquire the men's retailer.
The deal comes as Jos A. Bank and Men's Wearhouse continue their
monthslong battle to buy each other. Jos. A. Bank announced its
intent to purchase larger rival Men's Wearhouse in October. After
that effort was rebuffed, Men's Wearhouse mounted its own effort to
buy Jos. A. Bank, which was in turn rejected.
Jos. A. Bank's bid for Men's Wearhouse was backed by Eddie
Bauer's owner, Golden Gate Capital. Golden Gate bought Eddie Bauer
out of bankruptcy in 2009 for $286 million in cash plus the
assumption of hundreds of millions of dollars in liabilities.
That Jos. A. Bank is exploring another deal doesn't come as a
surprise. The company, which turned down Men's Wearhouse's $1.5
billion offer in December, has said multiple times that it might
pursue other takeover targets. In a securities filing in January,
Jos. A. Bank said: "The company has been and is continuing to
engage in preliminary negotiations that could result in an
extraordinary transaction, including the acquisition of a business
or assets from a third party that would be material to the
company."
Eddie Bauer makes casual clothing, sportswear and outerwear for
men and women. The retailer has around 370 stores in the U.S. and
Canada.
Kevin Kingsbury, Dana Mattioli and Dana Cimilluca contributed to
this article.
Write to Everdeen Mason at everdeen.mason@wsj.com
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