One of Men’s Wearhouse‘s biggest investors is officially on board with the retailer’s $1.6 billion hostile bid for Jos. A. Bank.
Eminence Capital, which owns a 9.8 percent stake in Men’s Wearhouse â€" and a 4.9 percent stake in Jos. A. Bank â€" wrote a public letter to the latter retailer’s board on Monday, urging the directors to accept the offer.
From the hedge fund’s letter, which refers to the two companies by their ticker symbols:
In October and November 2013, you were highly critical of MW’s failure to engage in good faith discussions with JOSB. Among other things, on November 15, 2013, you stated that “we continue to believe that a transaction between our two companies could be in the best interest of our respective shareholders.†In an October media interview Mr. Wildrick even indicated that JOSB would be receptive to being bought by MW if it would pay the same 42 percent premium JOSB was then offering for MW.
We, therefore, find it quite ironic and troubling that you and management have failed to engage in substantive negotiations with MW regarding their offer to acquire JOSB. Having already acknowledged the merits of a transaction with MW, we are left to believe that the only reason for your not engaging in discussions with MW is that you are more interested in protecting your own lucrative and prestigious board seats than in delivering value for your shareholders.
The letter adds more pressure on Jos. A. Bank, after Men’s Wearhouse took its offer directly to shareholders and announced plans to nominate two directors to Jos. A. Bank’s board. If elected, they would replace Jos. A. Bank’s chairman, Robert Wildrick, and its chief executive, Neal Black.
So far, Jos. A. Bank has rebuffed the offer, describing it as insufficient.
