Why Shares of Jos. A. Bank Clothiers and The Men's Wearhouse, Inc. Popped

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Jos. A. Bank Clothiers and The Men's Wearhouse, Inc.  were looking dapper today, each gaining as much as 12% after Men's Wearhouse made an offer to buy Jos. A. Bank.

So what: Today's news comes just weeks after Men's Wearhousedeclined a buyout offer from the smaller Jos. A. Bank at a purchase price of $2.5 billion. Men's Wearhouse this morning turned around and said it was willing to pay $55 a share for Jos. A. Bank, a 9% premium over its closing price yesterday, or about $1.5 billion. Shares of the smaller men's clothing retailer actually went as high as $56.90, an indication that the market believed Men's Wearhouse could end up paying a higher price for the takeover. Among other arguments, Men's Wearhouse said that the acquisition would add value for shareholders and create the country's premier men's apparel retailer.

Now what: Activist investors had been pushing Men's Wearhouse to sell itself or merge with another company, and its retaliatory offer seems to confirm that some kind of combination is in the best interest of both companies. In a press release issued this morning, Jos. A. Bank said only that it had received the offer from Men's Wearhouse, and "would evaluate the proposal and respond in due course." Shares of both companies could continue to move higher on hopes for an eventual deal.

One wonderful stock for 2014
The market stormed out to huge gains across 2013, leaving investors on the sidelines burned. However, opportunistic investors can still find huge winners. The Motley Fool's chief investment officer has just hand-picked one such opportunity in our new report: "The Motley Fool's Top Stock for 2014." To find out which stock it is and read our in-depth report, simply click here. It's free!

The article Why Shares of Jos. A. Bank Clothiers and The Men's Wearhouse, Inc. Popped originally appeared on Fool.com.

Fool contributor Jeremy Bowman has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 - 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

Read Full Story