The acquisition will cost JOSB $564 million in cash. JOSB will also issue stock valued at $56 a share to Eddie Bauer-owner Golden Gate Capital to cover the rest of the purchase. When the deal is completed, Golden Gate will have a 16.6% stake in JOSB, Reuters notes.
Eddie Bauer generated revenue of between $885 million and $895 million last year. JOSB indicated that it has been discussing the purchase with Golden Gate for two years, but reserved the right to abandon the Eddie Bauer acquisition if it received a superior offer from another party.
Additionally, JOSB said it would was launching a tender offer to repurchase 4.6 million JOSB shares at $65 a share, an 18% premium above Thursday’s closing price for JOSB stock.
On Friday, MW issued a statement noting that its board planned to “evaluate Men’s Wearhouse’s options with respect to Jos. A. Bank.” MW stock tumbled more than 6% on the news.
JOSB stock fell more than 1% in morning trading. JOSB stock has gained more than 25% over the past year.