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.
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.