Men’s Wearhouse Inc., is taking a long look at Allen Edmonds, with an eye toward a potential acquisition of the dress shoe maker.
Whether or not a deal is consummated between the two, a third party could also be impacted by the result — retailer Jos. A. Bank Clothiers.
A recent offer of $2.3 billion from Jos. A. Banks to acquire Men’s Wearhouse was given a thumbs down by the latter’s board.
The offer, reflecting a share price of $48, was reportedly rejected as too low, although it was about two dollars higher than the currently traded share price on the day of the tender.
Current market capitalization of Men’s Wearhouse is about $2.22 billion, depending on the close of daily trading in its equities. Jos. A. Banks is in the position of a David going after a Goliath, with a valuation of roughly $1.4 billion.
If Men’s Wearhouse buys Allen Edmonds, adding substantially to the former’s valuation, Jos. A Bank may be dissuaded from further pursuit of a purchasing deal.
With the acquisition of Allen Edmonds, Men’s Wearhouse would expand its position in the US footwear market which posted sales of $22.3 billion last year.
But if the Men’s Warehouse-Allen Edmonds deal doesn’t go down, Jos. A. Banks could sweeten its buy offer, depending on its ability to secure financing for the purchase. Whether or not the board green lights the deal is another matter.
According to the Allen Edmond’s website, their hand-crafted leather shoes were worn at their inaugurals by Presidents, George W. Bush, Bill Clinton, George H. W. Bush, and Ronald Reagen. The Port Washington, Wis., company was founded in 1922.