Men’s Wearhouse Shareholder Backs Bid for Jos. A. Bank
Eminence Capital, Men’s Wearhouse’s (NYSE:MW) largest shareholder, is backing the suit seller’s hostile bid to acquire rival Jos. A. Bank (NASDAQ:JOSB), putting pressure on the dueling retailers to reach a deal.
The activist hedge fund owns a 10% stake in Men’s Wearhouse, as well as 5% in Jos. A. Bank. When Jos. A. Bank began the takeover tug-of-war in September with an unsolicited $2.3 billion offer, Eminence urged Men’s Wearhouse to talk terms.
Now the shareholder is pushing for Jos. A. Bank’s board to accept the $1.6 billion proposal from Men’s Wearhouse, potentially making a counter offer difficult.
In a letter to Jos. A. Bank directors, Eminence chief executive Ricky Sandler said Monday the latest bid “provides the best path for shareholders to realize the significant value inherent in the combination of both companies.”
“Furthermore, we firmly believe that you will not be able to deliver comparable value to shareholders through any other strategic transaction or action available to you.”
The firm also accused the directors of protecting their board seats, saying they “already acknowledged the merits of a transaction” and should therefore engage in discussions with Men’s Wearhouse.
A representative of Jos. A. Bank declined to comment.
Eminence’s letter marks the first time the hedge fund has supported one of the retailer’s offers. Previously, it argued for some combination of the companies, citing the potential for $2 billion in cost savings and other benefits.
Last week, Men’s Wearhouse slightly increased its offer to $57.50 a share in cash and announced its intention to nominate two directors to Jos. A. Bank’s board. Hampstead, Md.-based Jos. A. Bank said it will make a decision by Friday.
Shares of Men’s Wearhouse ticked four cents lower to $51.04 shortly after the opening bell. Jos. A. Bank was down 21 cents at $55.80.