Jos A. Bank vs. Men’s Wearhouse boxing match continues
AGBeat recently told you of the potential merger of Men’s Wearhouse and Jos. A. Bank and very quickly the scenery is changing. Now, the gloves are coming off as both companies dance around the “ring” trying to decide what to do. While the companies are dancing, the shareholders are getting nervous. This would be a beneficial move for both sides; they just cannot seem to decide how to get it done. One major investor has had enough: Eminence Capital LLC.
According to a letter from Eminence to the company’s board, Eminence owns a 4.9 percent stake in Jos. A. Bank; however they also hold approximately 10 percent in The Men’s Wearhouse. Eminence wants Jos. A. Bank to negotiate with The Men’s Wearhouse in “meaningful, good faith negotiations” to reach a deal that would benefit both companies. In light of their inability to reach a decision, Eminence demanded that the board take no action that could jeopardize a possible deal.
Bring in the lawyers
They have filed a lawsuit against Jos. A. Bank for refusing to discuss the offer openly, as well as, making it more difficult for one investor to take control of the company. Eminence also stated it will file a complaint with the Court of Chancery of the State of Delaware over Jos. A. Bank’s refusal to negotiate, as well as, barring the company from attempting to prevent any acquisition by Men’s Wearhouse by pursuing another deal.
The CEO of Eminence Capital, Ricky Sandler, estimates that a merger could save about $2 billion per year, though it would not be as beneficial for competitors and consumers. But it will definitely be beneficial for shareholders. A Men’s Wearhouse purchase of Jos. A. Bank “provides the best path for shareholders to realize the significant value inherent in the combination of both companies,” Sandler stated in the letter. It seems the boxing match will continue until both companies can reach a concrete agreement.