Activist shareholder Eminence Capital LLC criticized Jos. A.
Bank Clothiers Inc.'s planned $825 million deal for Eddie Bauer,
calling the acquisition a poor strategic move at an excessive
price.
Eminence Capital, which owns a 4.9% stake in Jos A. Bank, has
been pressing for a deal between the retailer and rival Men's
Wearhouse Inc. Jos A. Bank and Men's Wearhouse have exchanged
takeover offers, but a deal hasn't materialized.
The letter from Eminence Capital Chief Executive Ricky C.
Sandler said the planned deal "is a poor strategic decision for
Jos. A. Bank at a price that is in our view excessive and almost
surely destroys shareholder value."
A representative from Jos. A. Bank wasn't immediately available
for comment.
Eminence asserted that more "than 40% of Eddie Bauer's sales are
to women and virtually all of its products are outside of Jos. A.
Bank's core men's tailored-clothing segment."
The letter also claims the planned deal confirms its accusations
that Jos. A. Bank's board and management team "are willing to
engage in desperate tactics in an effort to protect their jobs and
paychecks in blatant disregard for the best interests of
shareholders."
Last week, Jos A. Bank agreed to buy retailer Eddie Bauer, in a
deal that makes it trickier for Men's Wearhouse to pursue its offer
for Jos. A. Bank. Men's Wearhouse's overture came after it turned
down an earlier approach from Jos. A. Bank.
Write to Tess Stynes at tess.stynes@wsj.com
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