This story has been updated from 8:48 a.m. EST with a response by Jos. A. Bank and Eminence Capital as well as new stock prices.

NEW YORK (TheStreet) -- In a continuation of the battle over men's suits, Men's Wearhouse (MW) proposed to acquire Jos. A. Bank Clothiers (JOSB) for $1.54 billion.

The deal, in which Men's Wearhouse would acquire all the outstanding shares of its men's retail competitor for $55 a share, would create a combined company with more than 1,700 total stores and pro forma sales of more than $3.5 billion, Men's Wearhouse said in a press release.

The stocks of both retailers were surging on Tuesday, showing just how much investors want this deal to happen. Men's Wearhouse shares were up 11.3% to $52.38. Jos. A. Bank shares were jumping 11.1% to $56.21.

Jos. A. Bank confirmed on Tuesday that it received the unsolicited, non-binding acquisition proposal from Men's Wearhouse, according to a statement. The company simply said that its board of directors and advisors were evaluating the bid and that it would "respond in due course."

The two companies have been in the news over the past month, following Jos. A. Bank's bid for Men's Wearhouse, which the latter repeatedly rejected. Jos. A. Bank's acquisition bid expired on Nov. 14, after Men's Wearhouse refused to allow it access to non-public financial information.

Men's Wearhouse maintained that Jos. A. Bank's $2.3 billion acquisition proposal "significantly undervalued" the company.

However, Men's Wearhouse has been pressured by activist investor Eminence Capital to still consider a buyout after the Jos. A. Bank proposal expired. The investor owns 9.8% of Men's Wearhouse stock and is its largest shareholder.

Eminence Capital CEO and CIO Ricky Sandler said in its own statement Tuesday that the company is "pleased to see that the board of Men's Wearhouse agrees with us and recognizes the substantial benefits of merging with Jos. A. Bank."

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