NEW YORK (AP) -- Even though Men's Wearhouse has rejected a $2.3 billion takeover offer from rival Jos. A Bank, an analyst says that a deal may still happen in the long term.
Last week Men's Wearhouse Inc. rejected the unsolicited bid of $48 per share in cash, calling it "opportunistic and "inadequate." Jos. A Bank Clothiers Inc. said that it would continue to push for a deal and called the rejection "inexplicable."
Richard Jaffe of Stifel Nicolaus said in a client note that Jos. A Bank. Is committed to getting a deal done as it has hired two investment banks and Golden Gate, which has had success helping orchestrate retail buyouts in the past.
"We believe that this underscores Jos. A Bank's commitment and conviction that this is an attractive deal," the analyst wrote.
Jaffe said that Men's Wearhouse is going to take a thoughtful and methodical approach, keeping shareholders' best interests in mind. The analyst thinks that a deal could be reached at a higher price, possibly $52 per share.
Jaffe reaffirmed a "Buy" rating and $40 price target for Men's Wearhouse.
Its shares finished at $45.95 on Friday after hitting a high of $46.38 earlier in the session, its highest level since May 2007. Jos. A Bank shares finished at $48.67 on Friday. They have traded in a 52-week range of $37.31 to $50.65.