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The Morning Brief: Eminence’s Ricky Sandler Takes Cues from Dan Loeb

Ricky Sandler’s New York–based Eminence Capital fired off a press release Monday morning to tell the world it endorses The Men’s Wearhouse’s hostile takeover offer for Jos. A. Bank Clothiers, of which the firm owns 4.9 percent of the stock. It also owns close to 10 percent of Men’s Wearhouse. Eminence also filed a complaint in the Delaware Court of Chancery seeking preliminary injunctive relief in order to prevent Jos. A. Bank and its directors “from continuing to breach their fiduciary duties” by refusing to negotiate with Men’s Wearhouse by “pursuing an alternative transaction.”

In a letter made public that he delivered to the board of Jos. A Bank, Sandler urges the company to sit down with The Men’s Wearhouse and engage in “meaningful, good faith negotiations” to reach a deal. Revealing his inner Daniel Loeb, Sandler adds: “The only reason for your not engaging in discussions with MW is that you are more interested in protecting your own lucrative and prestigious board seats than in delivering value for your shareholders.” Sandler also expresses concern that Jos. A. Bank is controlled by “an entrenched board and management that is prepared to unleash a scorched earth campaign to protect its positions and those of management.”

Sandler then delivers a warning to the company to take no action that could jeopardize the completion of a merger with Men’s Wearhouse. “Make no mistake: we intend to hold each and every member of the JOSB board personally accountable to the full extent of the law if you fail to engage in good faith discussions with MW, or if you enter into any transaction that in any way impedes a potential business combination with MW,” he adds. “If necessary, we intend to pursue all available legal and other remedies against you and any other appropriate party.”

Paul Singer’s Elliott Management has identified a new activist target. The busy New York–based hedge fund firm on Monday disclosed it owns 6.2 percent of Juniper Networks and sent a 27-page presentation to the board of directors of the networking equipment company laying out how it would unlock value. The plan includes cutting costs, buying back $3.5 of stock and undertaking a “review” of the security and switching businesses. These moves could boost the stock price to $35 to $40 per share, Elliott states. Shares of Juniper closed Monday up about 7.50 percent, at $25.31.

Meanwhile, shares of McKesson fell nearly 5 percent after the company announced that it failed to reach the necessary level of tendered stock and convertible bonds to complete its acquisition of Celesio Finance B.V. Last week Elliott announced it agreed to sell to McKesson its position in Celesio stock and bonds after earlier holding out for a better price.

Good news for William Ackman. Shares of Beam, the distiller, surged nearly 25 percent on Monday after it agreed to be acquired by Japan-based Suntory Holdings Ltd. for $13.6 billion. At the end of the third quarter, Pershing Square Capital Management was Beam’s largest shareholder, and the stock was the hedge fund firm’s fourth largest holding, with nearly 21 million shares.

Coatue Management’s Philippe Laffont said in a CNBC interview Monday morning that he is a big fan of Apple and is eagerly awaiting its introduction of some sort of product for the home. He also said that if a new CEO of Microsoft were able to engage in aggressive cost-cutting, Microsoft’s stock could double. Laffont also said he is optimistic about Facebook and its 2012 Instagram acquisition, and he also likes Snapchat, the privately-held firm that recently turned down a $3 billion acquisition offer from Facebook. Laffont has a private investment in Snapchat. The Tiger Cub, whose hedge fund lagged the overall market with an upper teens return in 2013, earned $280 million in 2012, his second year on the Alpha Rich List.

Marc Lasry’s Avenue Capital has raised another $200 million for two European direct lending funds: Avenue Europe Capital Solutions Fund and Avenue Europe Capital Solutions Feeder. Last year Lasry raised $500 million for the same strategy from one investor.

Marko Dimitrijevic’s Everest Capital had a strong year in 2013. Its $500 million Everest Capital Global funds, launched in 1990, rose 41 percent last year. The Miami–based firm invests in developed, emerging and frontier markets across many asset classes. The Everest Frontier Markets funds, long-short equity offerings that invest in countries that are more speculative than the traditional emerging markets, jumped 29 percent in 2013. Altogether, the firm manages $2 billion.

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