* Raises offer to $63.50/share from $57.50
* Says could raise offer to $65.00 if allowed limited due
* Sues Jos. A. Bank, Golden Gate Capital
* Jos. A. Bank says will review deal; shares touch all-time
(Adds Jos. A. Bank, Golden Gate Capital's comments; updates
By Maria Ajit Thomas
Feb 24 Men's Wearhouse Inc pressed on
with its bid for Jos. A. Bank Clothiers Inc, boosting
its offer by more than 10 percent in spite of the smaller
company's effort to stay independent by buying outdoor clothing
retailer Eddie Bauer.
Men's Wearhouse raised its cash tender offer to Jos. A. Bank
shareholders to $63.50 per share, from $57.50, and added it
could increase the offer to $65 if it was able to conduct
limited due diligence.
The increased offer values Jos. A. Bank at about $1.78
billion based on its shares outstanding as of Nov. 2, up from
about $1.61 billion it offered last month.
Jos. A. Bank shares rose as much as 9.2 percent to a
life-high of $60.14 on the Nasdaq in morning trading. Men's
Wearhouse shares rose as much as 8.7 percent to $49.04 on the
New York Stock Exchange.
"We believe this offer clearly represents a superior
alternative for Jos. A. Bank shareholders compared to remaining
independent and acquiring Eddie Bauer," Eminence Capital Chief
Executive Ricky Sandler said on Monday.
Eminence Capital is Men's Wearhouse's largest shareholder
with a 9.8 percent stake. The company also owns 4.9 percent of
Jos. A. Bank.
The amended offer is conditional on the termination of Jos.
A. Bank's agreement to acquire Eddie Bauer, Men's Wearhouse
Jos. A. Bank said later in the day it would review the deal,
without offering any more details.
Men's Wearhouse urged its rival's shareholders to tender in
their shares in order to push Jos. A. Bank's board into resuming
Men's Wearhouse also said it had filed a lawsuit in the
Delaware Chancery Court alleging that the Jos. A. Bank board
breached its fiduciary duties to shareholders by adopting
measures to "thwart" Men's Wearhouse's tender offer.
Under the lawsuit, Men's Wearhouse said it seeks to prevent
Jos. A. Bank from proceeding with the Eddie Bauer acquisition
and wants the Jos. A. Bank board to revoke its poison pill.
"The Eddie Bauer transaction has little to do with the
long-term welfare of Jos. A. Bank, and has everything to do with
the short-term interest of the Jos. A. Bank board," Men's
Wearhouse said in its complaint.
Men's Wearhouse has also named affiliates of Golden Gate
Capital, the ultimate parent of Eddie Bauer, in the lawsuit.
Golden Gate had supported an earlier bid by Jos. A. Bank to
acquire Men's Wearhouse.
A spokeswoman for Golden Gate Capital declined to comment on
Men's Wearhouse and Jos. A. Bank - both of whom are known
for renting and selling tuxedos - have made and spurned offers
for each other over the past few months. In January, Men's
Wearhouse took its increased bid of $1.61 billion directly to
Jos. A Bank shareholders.
Men's Wearhouse also said on Monday that the expiration of
its amended tender offer has been moved forward to March 12 from
Jos. A. Bank shares were up 8.4 percent at $59.71 in late
afternoon trading. Men's Wearhouse shares were up 8 percent at
(Additional reporting by Siddharth Cavale in Bangalore; Editing
by Sriraj Kalluvila and Joyjeet Das)