Eminence Capital LLC, a New York-based hedge fund that is the largest stockholder of Jos. A. Bank Clothiers Inc., has sent a scorching letter to the board of the Hampstead-based men’s clothing manufacturer blasting Bank’s planned acquisition of outdoor retailer Eddie Bauer LLC in a cash-and-stock deal valued at $825 million.
Among other charges, Eminence complains that the acquisition is a “poor strategic decision” that “almost surely destroys shareholder value;” that it is a poor fit with Bank’s male-oriented products; that the price Bank would pay for Eddie Bauer would be excessive; and that Bank’s board has “issued … misleading financial guidance” in attempting to justify its action.
Eminence has made similar accusations in a lawsuit it has filed in Delaware Chancery Court.
Eminence has said it favors an acquisition of Jos. A. Bank by Houston-based Men’s Wearhouse, a move that the Maryland company is fighting.