A Reuters report said Men's Wearhouse Inc extended a USD1.5 billion acquisition bid to Jos. A. Bank Clothiers Inc just weeks after rejecting a takeover bid from the latter. Men's acquisition offer would have the company acquiring its smaller rival for USD55 per share in cash, which is a 9% premium to Jos A Bank's share closing price on Monday.

On Tuesday, shares of Jos A Bank increased 11.6% to USD56.41 in early trading, indicating a possibility that investors of the suit and tuxedo retailer were looking for a higher offer. Shares of Men's Wearhouse also saw its shares increase to 6%.

The offer was a form of retaliation from Men's Wearhouse following pressure from New York-based hedge fund Eminence Capital LLC, its largest shareholder. Men's Wearhouse, said the report, might have implied it deemed the enterprise value of Jos. A. Bank at USD1.2 billion.

A consortium of hedge funds being led by Eminence holds a collective 30% holding in Men's Wearhouse, and have tried to reach out to other investors to help convince the company to accept the takeover bid Jos A Bank extended earlier. Jos A Bank offered a USD2.3 billion or USD48 per share takeover bid to Men's Wearhouse, which was immediately rejected by the latter. Men's Wearhouse swiftly adopted a strategy in order to avoid a hostile takeover situation.

Eminence Capital CEO Ricky Sandler said, "We are pleased to see that the board of Men's Wearhouse agrees with us and recognizes the substantial benefits of merging with Jos. A. Bank."

Men's Wearhouse lead director of the board Bill Sechrest sounded confident about the capability of Men's Wearhouse to be able to consolidate Jos A Bank into the company's operations. Sechrest said, "We believe we are the right acquirer for this combination and that our experienced management team is best positioned to execute the integration of our companies."