Men's Wearhouse will review merger offer, investor says

Reuters

By Nadia Damouni

NEW YORK, Nov 12 (Reuters) - Men's Wearhouse Inc saidit would review a previously rejected merger with Jos. A. BankClothiers Inc and a return of capital to shareholders,major investor Eminence Capital LLC said on Tuesday.

The New York-based hedge fund, which is Men's Wearhouselargest single shareholder with almost 10 percent of stock,urged the company to quickly engage with smaller rival Jos. A.Bank over a merger offer Men's Wearhouse turned down in October.

Eminence CEO Ricky Sandler wrote in a letter to theretailer's chief executive officer, Doug Ewert, that he wasencouraged by comments in a telephone call on Monday that thecompany would review all strategic options, including the mergerand a "significant" return of capital to shareholders.

"We also fully expect you and the board, given the explicitcommitment to explore all options, to actively engage with Jos.A. Bank before their deadline of November 14, 2013," Sandlersaid.

Men's Wearhouse shares rose as much as 4.5 percent to morethan $48 per share after the letter was released. They arecurrently trading around $47.26.

In October, Jos. A. Bank offered to buy Men's Wearhouse forabout $2.3 billion to create a men's apparel heavyweight withmore than 1,700 stores - a proposal that Men's Wearhouse swiftlyrejected.

Eminence disclosed in a filing on Nov. 7 that it holds 4.7million shares in Men's Wearhouse. The hedge fund previouslysaid reasons for rejecting the Jos. A Bank takeover offer were"reckless and misinformed," though it agreed with Men'sWearhouse that the $2.3 billion bid was too low.

Jos. A. Bank said last month it may consider raising its $48per share offer if it was allowed access to its larger rival'sbooks for due diligence. If it wasn't allowed access by November14, Jos. A. Bank said it would drop its bid.

A representative for Men's Wearhouse was not immediatelyavailable for comment.

Jos. A. Bank is being advised by Goldman Sachs and Financo.Its legal advisers are Skadden, Arps, Slate, Meagher & Flom andGuilfoil Petzall & Shoemake.

Men's Wearhouse is being advised by Bank of America MerrillLynch, JPMorgan Chase and law firm Willkie Farr & Gallagher.

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