After turning down a $2.4 billion bid from Jos. A .Bank, Men's Wearhouse offered its own deal for $1.5 billion Tuesday CNN Money reported.
The news is the latest development since Eminence Capital has attempted to get Men's Wearhouse to accept Jos A. Bank's previous deal.
"It certainly does add to the pressure if lots of stock is flowing from long-term investors to shorter-term, event-driven investors," Spencer Klein, a partner with law firm Morrison Foerster told Reuters.
Eminence Capital, Men's Wearhouse's largest contributor has been negotiating with shareholders to discuss the next steps for the company Topics have included a revamp of bylaws to allow other contributors to eliminate directors without giving a reason.
According to The New York Times, Jos A. Bank suggested the idea in September for $48 a share. Men's Wearhouse halted talks however, and chose not to proceed with the offer because they felt it was not realistic. Men's Wearhouse therefore attempted to revive itself by increasing sales a maximum $550 million in three years.
The Men's Wearhouse board claims the bid underestimated the company's worth and did not take the shareholders best interests into account The Times reported.
Men's Wearhouse rejected Jos. A. Bank's initial $2.3 billion bid to take over the struggling retailer last month.
This is because Men's Wearhouse said it had twice as many stores as its competitor and experienced 13 consecutive quarters of growth in same store sales through its main locations, while Jos A. Bank's revenue decreased three consecutive quarters.
Jos A. Bank introduced the idea to merge with its competitor three months after Men's Wearhouse let its founder and chairman George Zimmer go following a power struggle over privatizing the company.
"The formulaic, knee-jerk rejection by Men's Wearhouse, and their refusal to even discuss our proposal, do not serve the interests of their shareholders or their customers," Jos. A. Bank said in a statement CNN reported.
