Business

Men’s Wearhouse, Jos. A. Bank mired in lawsuits

The mudslinging has gotten worse between Men’s Wearhouse and Jos. A. Bank — and the suits at an activist investment firm just got dirty.
Jos. A. Bank on Friday rejected a $1.61 billion hostile takeover bid from Men’s Wearhouse, calling it an “opportunistic” offer that “significantly undervalues” the company while questioning the motives of its archrival.

Separately Friday, Jos. A. Bank struck back in court at activist investor Eminence Capital, whose CEO, Ricky Sandler, sued this week to force Jos. A. Bank into the proposed merger with Men’s Wearhouse.
Jos. A. Bank — which started the three-way fracas last fall when it launched a takeover bid of its own for Men’s Wearhouse — raised questions about the timing of stock trades made by Eminence shortly before it disclosed its initial offer last October.

“Notably, plaintiff omits to inform the court that… shortly before public disclosure of Jos. A. Bank’s offer to Men’s Wearhouse, plaintiff purchased a significant amount of Men’s Wearhouse stock,” Jos. A. Bank alleged in a court filing late Friday in Delaware.

Jos. A. Bank, led by CEO R. Neal Black, cited a Nov. 7 13D filing made by Eminence, which disclosed that during the three days before Jos. A. Bank’s $2.3 billion takeover offer went public, Eminence scooped up more than 800,000 shares of Men’s Wearhouse in the $35 range.

After the offer was disclosed Oct. 9, the shares soared above $43, bagging a single-day paper profit of more than $6 milllion for Eminence.

According to the filing, Eminence continued to amass Men’s Wearhouse shares as they rallied in subsequent weeks. On Friday, they closed at $50.45.

Representatives for Eminence couldn’t be reached for comment.

Earlier this week, Eminence sued to block Jos. A. Bank from potentially acquiring another company itself — a move that Jos. A. Bank recently said it is weighing, and which could derail a deal with Men’s Wearhouse.