This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Jos. A. Bank Activist Alters Suit

NEW YORK (The Deal) -- Activist investor Eminence Capital LLC threw the latest volley in the battle over the future of Jos. A. Bank Clothiers (JOSB) by filing an amended lawsuit in Delaware court arguing that the company not only is refusing to negotiate a potential acquisition by Men's Wearhouse (MW - Get Report) but that they also appear to be on the "cusp" of announcing a "blocking" acquisition of Eddie Bauer.

The insurgent, which filed an amended complaint obtained by the Deal Wednesday morning, said that the "non-core" acquisition would "diminish" the company's value and make Jos. A. Bank an "unattractive target for Men's Wearhouse."

The original suit, which was filed by Eminence on Jan. 13, came after Jos. A. Bank rejected efforts by Men's Wearhouse to buy the men's apparel company. That rejection itself was preceded by Jos. A. Bank's unsuccessful unsolicited proposal in late September to acquire Men's Wearhouse for $48 per share or $2.3 billion. Reports that Jos. A. Bank was considering an acquisition offer for Eddie Bauer emerged over the past week.

However, Delaware lawyers at firms not involved in the suit argue that Eminence's action is unlikely to succeed on its merits because, at the very least, it is premature - Jos. A. Bank hasn't made an acquisition yet, and Eminence is seeking an injunction against a hypothetical deal that has not been announced.

Must Read: J.C. Penney's Comparable Sales Are Up, But Investors Flee

Also, should Jos. A. Bank strike a deal to acquire Eddie Bauer or another company, observers note that they would need to demonstrate that they were considering acquisitions as part of their strategic plan prior to the Men's Wearhouse bid.

One attorney noted that Jos. A. Bank's unsuccessful bid to buy Men's Wearhouse would likely help Bank's defense because it is evidence that they are serious about making acquisitions rather than being acquired.

"Jos. A. Bank has to show that they have a long-term plan that is likely to yield greater value for the stockholders than the short term premium being offered by Men's Wearhouse," he said.

He added that they don't need to show that they were specifically interested in buying Eddie Bauer in the months prior to the Men's Wearhouse offer but that they were reviewing whether they should make strategic acquisitions during that period.

Concerns raised by Eminence that an Eddie Bauer-Jos A. Bank combination makes less sense than a Jos. A. Bank-Men's Wearhouse deal will not likely help Eminence's lawsuit if Jos. A. Bank can show that they were considering deals that took them outside of their core competency.

"It doesn't have to be a merger of equals," he said.

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
JOSB $64.98 -0.05%
MW $59.22 0.71%
AAPL $123.12 0.29%
FB $93.74 -0.46%
GOOG $625.95 -0.21%

Markets

Chart of I:DJI
DOW 17,461.70 +21.11 0.12%
S&P 500 2,075.36 +7.72 0.37%
NASDAQ 5,048.9960 +9.22 0.18%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs