Over the past two months, Men’s Wearhouse has steadfastly rebuffed a $2.3 billion takeover bid by a smaller rival, Jos. A. Bank.
Now an activist investor is hoping to change the retailer’s mind.
A hedge fund, Eminence Capital, has acquired about a 9.8 percent stake in Men’s Wearhouse and plans to push the company into reconsidering strategic options like the proposed merger with Jos. A. Bank, a person briefed on the matter said on Tuesday.
Eminence, which oversees about $4.5 billion, had already begun building up a stake in Men’s Wearhouse by the time Jos. A. Bank disclosed its $48-a-share takeover bid last month, this person said. It is said to have paid around the mid-$30s for its shares.
After conducting some research, the hedge fund concluded that a merger of the two made sense, particularly with Jos. A. Bank allying itself with the private equity firm Golden Gate Capital.
While Eminence thinks that the current takeover bid is too low, it believes that Jos. A. Bank would be willing to raise its offer. The retailer said as much last week, though it added that any bump in price would require Men’s Wearhouse to begin merger talks.
So far, however, Men’s Wearhouse has been steadfast in refusing to take that step.It dismissed its unwanted suitor’s latest entreaty earlier this week, well ahead of a Nov. 14 deadline, after which Jos. A. Bank has said that it will walk away.
The men’s suiting specialist has consistently argued that the takeover bid is “highly opportunistic†and has instead presented a plan that it contends will raise sales by up to $550 million by 2016.
Shares in Men’s Wearhouse jumped after CNBC reported Eminence’s stake, and as of late afternoon on Thursday were up 8 percent at $45.87.
A representative for Men’s Wearhouse said in a statement: “We are enthusiastic about Men’s Wearhouse’s prospects and are committed to acting in the best interests of all shareholders.â€
Representatives for Jos. A. Bank and Eminence declined to comment or weren’t immediately available for comment.
