This story has been updated from 9:52 am ET with new information.
While Men's Wearhouse has rejected Jos. A. Bank initial $2.3 billion cash takeover offer, investors applauded the proposed merger as a cunning solution to the struggles of two menswear retailer struggling for customers.
At present, though, Men's Wearhouse isn't interested in a marriage. The Houston-based retailer said the bid "significantly undervalues" the company and "is not in the best interests of Men's Wearhouse or its shareholders."
But maybe Men's Wearhouse can be convinced to come to the party.
Shares of both companies were surging on the news. Men's Wearhouse was up a whopping 29% to $45.32, reaching a six-year high while Jos. A. Bank shares were gaining 7.7% to $44.88. The market apparently envisions that this deal will eventually be approved, and Stifel Nicolaus analyst Richard Jaffe agrees.
"We believe this is a favorable deal," for Men's Wearhouse, Jaffe, who rates the company a "buy," said in an investor report. "The all-cash proposal should deliver a substantial premium to MW shareholders while creating the leading men's apparel and sportswear designer, manufacturer and retailer in the U.S."
It's not just Men's Wearhouse shareholders that could win. Jos. A. Banks arguably needs Men's Wearhouse.