NEW YORK (TheStreet) -- Jos. A. Bank Clothiers (JOSB) may have pulled its bid to acquire Men's Wearhouse (MW) but one activist investor continues to argues that clothing retailer should still consider a buyout.
Eminence Capital, the owner of 9.8% of Men's Wearhouse common stock and its largest shareholder, is apparently angry that the men's specialty-clothing retailer failed to engage in discussions with its largest competitor.
"Eminence Capital believes that by allowing yesterday's deadline to expire, the board has confirmed that it is not committed to exercising its basic fiduciary duties to shareholders and is satisfied with the status quo," it said in a release on Friday.
Shares of Men's Wearhouse was gaining 0.7% to $46.44 while Jos. A. Bank was adding 0.6% to $50.62.
The investor is seeking to call a special meeting with Men's Wearhouse shareholders in order to amend the company's bylaws so it can replace board members and "allow shareholders to remove directors without cause and increase board accountability," Eminence Capital said. The investor has filed a preliminary solicitation statement with the Securities and Exchange Commission.According to Eminence Capital, Texas law allows for a special meeting to be called by shareholders of at least 10% of all of the shares of Men's Wearhouse entitled to vote at the special meeting. Men's Wearhouse is based in Houston. "In light of the board's actions, we are forced to launch this initiative that will give shareholders the opportunity to effect important corporate governance changes at Men's Wearhouse," Eminence Capital CEO Ricky Sandler said in a statement. "We continue to encourage the board to take immediate steps to complete its review of strategic options, including a merger with JOSB, that was disclosed in our November 12 letter," Sandler said. "If the board fails to do so, our special meeting initiative will give shareholders the tools to hold the board accountable for its failed leadership." As expected, Jos. A. Bank terminated its all-cash offer on Thursday for Men's Wearhouse after it refused to engage in discussions with the Hampstead, Md.-based company and denied it access to non-public financial information.
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