(BFW) RWE Seeks AGM Approval for Option to Raise Capital, DLF Reports

RWE Seeks AGM Approval for Option to Raise Capital, DLF Reports
2014-02-02 17:46:02.795 GMT


By Tino Andresen
     Feb. 2 (Bloomberg) -- RWE doesn’t plan capital increase,
would use option only in case of unanimous approval of
supervisory board, Deutschlandfunk reports, citing interview
with CEO Peter Terium.
  * Terium considers option “protection”
  * NOTE: Last month, RWE fell on report of option to raise
    capital

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To contact the reporter on this story:
Tino Andresen in Dusseldorf at +49-69-92041-395 or
tandresen1@bloomberg.net

To contact the editor responsible for this story:
Will Kennedy at +44-20-7073-3603 or
wkennedy3@bloomberg.net

>>> BMPS controlling shareholder has two consortia bidding for 33.5% stake

BMPS controlling shareholder has two consortia bidding for 33.5% stake

Fondazione MPS, the banking foundation seeking to exit the listed Italian bank Banca Monte dei Paschi, has two consortia interested in its 33.5% stake, the Italian-language daily Il Sole 24 Ore reported. The unsourced report said that one consortium is Italian-based led by banking foundation Fondazione Cariplo and while the other is from overseas with investors including Pamploma, Abu Dhabi sovereign wealth fund Aaabar and a South American based investment fund.

The article said that the South American fund could be controlled by a Mexican business family

Other banking foundations that could take part in the Cariplo consortium include Cariverona, Compagnia San Paolo and Fondazione Cassa di Risparmio di Lucca, the item said.

The report added that the Italian consortium has not yet committed to a bid and is still waiting for a request from the Bank of Italy and the Italian Treasury to go ahead.

The article noted that Fondazione MPS is seeking to sell the stake before May, when BMPS is due to launch a EUR 3bn capital increase


Source Il Sole 24 Ore

FT : Emerging markets are badly served by ETFs

Emerging markets are badly served by ETFs

Investment vehicles have helped to create another boom and bust cycle
Money is flowing out of the emerging markets. A debate is raging over whether this is the fault of the US Federal Reserve, which has effectively encouraged investors to bring their money back home.
That debate is right and proper. But the fund management industry must face a debate of its own. Just why has the money funding companies and governments in the emerging markets proved so fickle? Even given decisions by the Fed, how can sentiment towards such a large swath of the world turn so rapidly?

The raw facts are that a remarkable amount of money has been pulled out of EM with indecent haste; and that this was the first emerging market sell-off to be conducted mostly through ETFs. They now account for about $300bn of the $1.3tn in emerging market equities, according to Morgan Stanley – and yet the iShares ETF tracking the MSCI EM index, the biggest in the sector, launched only in 2003.
The total pulled out exceeded the sums that exited during the 2008 crisis, even before emergency rate rises in Turkey, India and South Africa.
The streak of outflows now stands at 14 weeks, the longest such streak since 2002 – although Geoff Dennis of UBS points out that 2001, the year of the Argentine devaluation, saw a streak almost twice as long. Flows can stay negative for a while.
According to TrimTabs, emerging market ETFs suffered redemptions of $4.4bn (4.8 per cent of their assets) last week. Over the past three months, they have shed 15.8 per cent of their assets.
There has been no particular economic trigger in the EM universe. Ugly political eruptions have come in countries already perceived to carry a high political risk, like Argentina, Ukraine, or Turkey.
So why such a swift flight of capital? A sharp turn in western investors’ sentiment need not have such an effect, as emerging markets investing should be about patience. They are volatile. It could take time for their value to shine through.
Closed-end funds, with no need to buy or sell shares in response to swings in sentiment among their investors, should be the ideal vehicle. Saker Nusseibeh, chief executive of Hermes Investment Managers in the UK, points out that the Foreign & Colonial Investment Trust was investing in Brazil, Russia, India and China in the 1880s – without the aid of acronyms, and with no need to sell if investors sold their shares in the fund.
Closed-end funds have disadvantages. But what can possibly have changed about EM assets so that it now makes sense to hold them in vehicles designed to be readily entered and exited by the minute throughout the trading day?
Beyond the basic structure of ETFs, there are flaws in the way they track indices and in the way emerging markets investments are marketed by Wall Street and the City. This starts with the absurd attachment to acronyms, which dates back to Goldman Sachs’ success in marketing funds tied to the Brics – Brazil, Russia, India and China. This led to a gush of funds into those countries, and has been followed by a series of increasingly contrived acronyms, including CIVETs, BIITS and MINTs. This is not a sensible way to allocate capital.
Index methodology itself has a problem. Weighting by capitalisation means money goes to the biggest firms – often formerly nationalised utilities, resources groups and oligopolists – and not smaller companies. Debt indices send capital to countries with the most debt. While more specialist sectoral ETFs are common for the US, EM remains dominated by big indices. And EM ETFs tend to lag their target indices far more than ETFs in developed markets.
Can these problems be fixed by internal tinkering? Last week saw the launch of the S&P Emerging Markets Domestic Demand index, focusing on companies that serve the growing middle-class. It will doubtless soon be the basis for an ETF.
Emerging Global Advisors in New York offer specialist ETFs covering the “Beyond Brics” nations – excluding the Brics, Korea and Taiwan – and focusing on EM demand. Less mature countries and sectors are less correlated to the developed world and less volatile.
So ETFs can indeed be improved. Do away with the notion that “emerging markets” is one coherent asset class, and a gimmicky fixation with acronyms, and it will help. Ditch bond indices that send the most money to the most indebted nations, and stock indices that send capital to oligopolists and the concept will improve.
But the notion of trading in complicated, heterogeneous and often illiquid markets using ETFs has had its day. They have misallocated capital, and helped to create yet another boom and bust cycle for the emerging world when many countries had fixed deep-seated institutional problems.
There are better ways to invest in emerging markets than through ETFs.

FT : SocGen beefs up US and Asia bond trading units

SocGen beefs up US and Asia bond trading units

Société Générale is expanding its bond trading business in a move to get a stronger global foothold as most of its European banking rivals are cutting back.
France’s second-largest lender by market value plans to add up to 150 staff to its 1,070-strong trading workforce in Asia and the US this year as it aims to build up its credit, rates and currencies business, people close to the situation said.

It comes as competitors such as UBS, Credit Suisse, Barclays and Deutsche Bank are reducing staff and capital in their fixed income units in an effort to cope with falling revenues, stricter capital rules and a costly move towards electronic trading.
SocGen, which declined to comment, is looking to take advantage of these withdrawals by building up a leaner technological platform, hiring staff and taking market share from rivals, according to people close to the situation.
The bank has a large equity derivatives trading business in a Europe-focused niche strategy which has been called the “haute couture” of investment banking. It also has a sizeable European interest rate trading unit, but is otherwise relatively small in fixed income.
The return to a global expansion strategy comes after chairman and chief executive Frédéric Oudéa has in the past few years propped up SocGen’s balance sheet and funding structure. Analysts expect SocGen’s crucial core tier one ratio for the end of 2013 to be around 10 per cent under incoming Basel III rules.
The group has been has been putting greater emphasis on its investment banking division, at the end of last year buying the half of derivatives broker Newedge that it did not own and selling its stake in the more stable asset management business Amundi.
In a move aimed at better serving its clients across the globe, it will focus its fixed income growth on credit trading, where it is a small player even in Europe, as well as its rates and currencies business in Asia and the US.
This comes as fellow French rival BNP Paribas is also adding staff in its fixed income operations across the globe.
Some analysts are wary about SocGen’s growth strategy. “To compete in fixed income you need a big balance sheet and not too many concerns over your capital strength,” said James Chappell, analyst at Berenberg, who believes that the bank still has a capital shortfall mainly stemming from the investment bank.
SocGen generated a return on equity of 8.6 per cent in the first nine months of 2013, but investors will be looking for more when the bank reports full-year results on February 12. Mr Oudéa said late last year that 10 per cent return on equity should be “a minimum”.

FT : French business delegation to Iran aims for early bird advantage

French business delegation to Iran aims for early bird advantage

A delegation of more than 100 French companies is set to visit Tehran on Monday in the biggest demonstration of western business interest in Iran for more than a decade.
The three-day visit, which includes top French companies such as oil major Total, engineer Alstom, telecoms group Orange and carmaker Renault, has raised hopes in Iran that an interim deal on its nuclear programme could lead to a return of foreign investment halted by sanctions imposed in retaliation for Tehran’s perceived bid to acquire nuclear weapons.

Although France has adopted a tough stance against Iran’s nuclear programme, it is also moving quickly to position French business to take advantage of last month’s potential opening up of a big new market for its companies.
The French delegation includes government representatives but not France’s two big nuclear power companies, Areva and EDF.
Medef, the employers’ federation which is leading the delegation, said it received huge demand when it announced the trip after making a preliminary visit in December.
“Although the recent nuclear deal only offers limited lifting of sanctions, there is a new dynamic. The possibility of access to a market of 80m people is very attractive,” said a Medef official.
“Of course, European companies have to rush and be prepared before American companies come,” said one western diplomat in Tehran.
Companies on the trip include representatives from consulting, asset management, engineering services, the food industry, shipping, law, insurance, advertising, construction, pharmaceuticals and sports training, as well as one bank.
Organisers stress that the visit is exploratory and aimed at contact-making, with no contracts expected at this stage. “It is a prospective visit,” said a spokeswoman for Lafarge, the leading building materials supplier that has operations in neighbouring Iraq and Pakistan.
Many European companies, including from France, Germany and Italy, either left Iran or minimised their operations in recent years due to anti-western policies which led to unattractive investment terms under former president Mahmoud Ahmadi-Nejad, and a tightening of international sanctions over the nuclear programme.
But the victory of centrist president Hassan Rouhani last summer paved the way for the Islamic regime to strike an interim nuclear deal with six major powers – the US, UK, France, Russia, China and Germany – in November, which took effect in January.
In depth

Iran under Rouhani
'Iran after Rouhani' in depth
Iran’s President Hassan Rouhani is looking to pursue a foreign policy of moderation after tough financial sanctions have brought the Islamic Republic’s economy to a standstill
Iran has since started restricting its uranium enrichment activities while sanctions have been suspended on certain sectors, such as petrochemicals and auto companies. Frozen Iranian funds worth $4.2bn will gradually be released over the next six months. However, oil and banking sanctions – the most crippling of all – will remain in force during this period.
“In recent years, the cold weather of sanctions was hitting our face, but now we feel warm weather is touching our back,” said Daniel Bernbeck, managing director of the German-Iranian Chamber of Industry and Commerce in Tehran.
Iran’s business community desperately needs foreign investment and technology to revive many industries, including car manufacturers and spare part producers which were dependent on France’s Peugeot and Renault. Most domestic industries have either gone bankrupt or operate far below their capacity due to previous populist policies and sanctions.
Renault, which was selling nearly 100,000 cars a year in Iran before sanctions came into force, has already resumed shipments to Iran and expects its car production in the country to pick up in the first half of this year.
Rival French carmaker PSA Peugeot Citroën, which sold 458,000 cars in Iran in 2011, accounting for nearly a third of the total market, is also poised to return to the country, which was once its second largest market after France.
Jean-Baptiste de Chatillon, Peugeot’s chief financial officer, said last year that the sanctions had cut €10m a month from operating profit. Renault took a €512m writedown on its Iran operations last June.
Despite uncertainty that the nuclear agreement will lead to a long-term solution, some Iranian businessmen say there is a high chance of tentative deals being agreed with visiting business delegations that they can turn into contracts as soon as a permanent deal is done.
A German business delegation, comprised of specialised companies in the food industry, health, spare auto parts industries, as well as in urban planning and engineering, is due late February. A Dutch delegation is also expected soon.
Gholam-Hossein Shafei, head of the Iran chamber of commerce, said visits by foreign delegations to the chamber had increased more than fivefold compared to last year. “Most of my working hours are devoted to seeing economic teams of different countries each day,” he said.
Meanwhile, rumours are rife in Tehran that American companies through their representatives in other countries are also negotiating with senior Iranian officials.
“When European businessmen walk out of their meetings with Iranians, they sometimes notice US companies’ representatives walk in,” said one western market analyst. “Americans can deprive Europeans of some opportunities but their presence is encouraging that sanctions may be lifted.”

FT : Norway’s sovereign wealth fund joins exodus from Israel

Norway’s sovereign wealth fund joins exodus from Israel

Norway’s $810bn Government Pension Fund Global, the world’s largest sovereign wealth fund, has been barred from investing in two Israeli companies due to their “serious violations” of individual rights.
The Norwegian finance ministry has blacklisted Africa Israel Investments and Danya Cebus, a listed subsidiary 82 per cent owned by AII, because of their alleged involvement in constructing settlements in East Jerusalem, which “must be regarded as illegal”.

The Fourth Geneva Convention bars occupying powers from transferring part of their own civilian population into the territories they occupy.
The move comes amid a growing European boycott of Israeli companies with activities in the Palestinian territories.
In January PGGM, the Dutch pension fund, dumped its holdings in five banks allegedly involved in financing illegal settlements, while several other large investors are also reviewing their holdings.
Last week actress Scarlett Johansson severed her relationship with the Oxfam International charity after being criticised for promoting Sodastream, an Israeli home drinks carbonation company that has a factory in the Maale Adumim settlement near Jerusalem.
Both AII and Danya Cebus were originally blacklisted between August 2010 and August 2013 in relation to their settlement activity. According to Norway’s Council of Ethics, the ban was dropped after AII said neither it nor any of its subsidiaries was involved in or had plans to construct settlements in the West Bank. However the council said it had since received information that Danya Cebus was involved in such activity. Neither company could be reached for comment.
Shikun & Binui, an Israeli property group, was blacklisted on the same grounds in 2011.
The Norwegian finance ministry has also blocked the pension fund from investing in Sesa Sterlite, a newly formed India-focused subsidiary of London-listed mining company Vedanta.
Vedanta itself and two other subsidiaries have been blacklisted since 2007, when the ethics council said their operations in India carried “an unacceptable risk of severe environmental damage and systematic human rights violations”.
The pension fund has also been barred from investing in the sovereign bonds of North Korea, Syria and Iran, although none of these states currently issue government debt. It has, however been given the green light to invest in sovereign bonds issued by Myanmar.

FT : The EM’s ‘fragile 8′ must save themselves

The EM’s ‘fragile 8′ must save themselves

The start of 2014 has seen the global markets decisively in risk-off mode, with global equities falling, government bonds rallying and many emerging market currencies collapsing. Yet few investors currently believe that the risk-off pattern will continue in the developed markets (DM’s) for the year as a whole. The bullish consensus for developed equities remains firmly intact, for now.

Economic fundamentals in the DM’s have not really changed. There have been some mildly disappointing data releases in the US, but these have been mostly due to an excessive build-up in manufacturing inventories since mid 2013, and the prospects for final demand seem firm.

Furthermore, the Fed’s tapering of asset purchases has now been clearly separated from its intentions on short rates, which remain extremely dovish. So far, the decline in developed market equities has been very minor compared with the rises seen last year, and do not even constitute a normal pull-back in a bull market.

In the emerging markets (EM’s), however, there is much greater cause for concern. As the graph above shows, the EM crises in the late 1990s did not, in the end, prove fatal for equities in the US and Europe, but they did cause occasional air pockets, notably in 1998. This is why investors are focused on whether the current EM crises will deteriorate further, and whether they will eventually take the DM’s down with them.

The causes of the crises are not hard to discern, and are familiar from the 1990s. After 2008, many of the EM’s tried to avoid the consequences of the Great Recession in the DM’s by adopting aggressively expansionary fiscal and monetary policies, believing that their growth miracles of the 2000s could continue.

They were pushed in this direction by the capital inflows that followed quantitative easing by the Fed. Classic, and severe, credit bubbles ensued, with current account deficits widening rapidly in a group of countries that last summer became known as the ‘fragile 5′ – India, Indonesia, Brazil, Turkey and South Africa. These five have remained fragile, and have now been joined by Argentina, Russia, and Chile. So now we have the ‘fragile 8′, and the number could grow further. (See this excellent analysis by John Mauldin.)

These countries have many differences, but they also have something in common: a requirement to improve deteriorating balance of payments positions, which are much harder to finance now that the Fed is withdrawing QE. Some of them are inclined to blame the Fed for their predicament, but this is cutting very little ice in Washington. Unlike the onset of the EM crises last summer, the latest bout has not coincided with any change of opinion about monetary policy in the DM’s.

Instead, the markets seem to be reacting to the fact that many of these countries need to undertake several difficult policy steps, all at the same time: lower real exchange rates, higher real interest rates, fiscal tightening in some, and structural reforms in many.

In other words, the economic problems of the ‘fragile 8′ are increasingly being viewed as internal to them, and there is scepticism about the ability of their political systems to deliver the necessary policy adjustments. (Paul Krugman points to the dangers of “economic populism” [1], and makes the case for restrictive policies in some EM’s, here.)

Of course, the slowdown in China has not helped the fragile group, especially those that are dependent on commodity exports. But a dangerous dynamic is now in place, familiar to those who remember the melt-down of the emerging Asian economies after the financial crisis of 1997. Then, China remained immune from the worst features of the crisis, but that did not prevent the rest of Asia from experiencing severe recessions as “sudden stops” in capital inflows forced them to adjust their balance of payments deficits very abruptly.

The decades-long consequences of these sudden stops included a decline in the investment/GDP ratio of 9 percentage points, and a drop in trend GDP growth of 3.3 per cent. (See Carmen Reinhart and Takeshi Tashiro here.) As the DM’s are now discovering, financial shocks have exceptionally long-term effects on economic performance. It is a serious mistake to expect any of this to blow over rapidly.

Optimists claim that there are grounds for hoping that some or all of the fragile group may ultimately avoid the worst fate of the Asian tigers. One difference is that exchange rates have been much more flexible during the onset of the crisis this time than they were in the 1990s, when most of the relevant economies were trying to run fixed exchange rates against the dollar.

This encouraged an even bigger build-up in external debt in the severe 1990s cases than has happened now (though many EM’s do look vulnerable on this score – see Jens Nordvig’s table on the left). And the collapse in confidence was all the more sudden, because banking sectors were much more severely exposed to the revaluation of large foreign debts.

This time, the more gradual adjustment of EM exchange rates – upwards before the crisis and downwards now – may provide a shock absorber. Still, the consequences in terms of imported inflation, declining domestic demand and imploding credit bubbles will inevitably be very challenging for policy makers, many of whom have become hubristic after the EM miracle years in the 2000s.

Some will be able to meet the challenge. India, for example, is now doing much better with Raghuram Rajan at the central bank. But others may choose to follow Argentina by refusing to accept the laws of market economics. They will be tempted to monetise the fiscal deficits that will follow economic slow-downs, thus feeding a downward spiral in nominal exchange rates. They cannot realistically hope to be rescued from this fate by “policy co-operation” from the Fed or the IMF; it is largely up to them.

Could all this develop into a major global shock? Exports to the ‘fragile 8′ still represent only 0.7 percent of US GDP, so a damaging trade shock is not on the cards. The exports of the euro area are about twice as vulnerable to the ‘fragile 8′ as the US, and a small number of euro area banks (especially in Spain) are very exposed to loan losses in the EMs. This means that there could be contagion to southern Europe, where some banks may already need to raise large amounts of new capital after the ECB’s stress tests.

But the overall consequences for the developed economies still seem largely manageable – always assuming, of course, that China does not hard land.

FT : Japan in danger of missing 2020 budget target

Japan in danger of missing 2020 budget target

Japanese prime minister Shinzo Abe answers questions from the opposition Democratic party of Japan leader Banri Kaieda (not pictured) during the lower house parliament session in Tokyo on January 28 2014©AFP
Japan is on course to break a pledge to balance its budget by 2020, according to a new government forecast that sets up a battle between fiscal hawks at the ministry of finance and doves in the cabinet of Shinzo Abe, prime minister.
Private-sector economists have long seen as ambitious the government’s goal of erasing its primary deficit – the gap between revenues and expenditure, excluding debt payments and bond issuance.

Yet, last week the ministry of finance (MoF) made its first admission that the target was unlikely to be hit, saying that even with the most optimistic assumptions for growth and cuts to spending, the deficit would be as wide as Y6.6tn ($64bn) in the 2020 fiscal year.
Analysts said the projection seemed timed to coincide with the beginning of discussions on corporate tax reform this month, under the “third arrow” of Mr Abe’s economic policy. While the prime minister is set to push for growth-friendly measures such as bringing down Japan’s effective corporate tax rate of about 35 per cent, MoF worries that such moves could threaten revenues, casting doubt over the government’s determination to repair its finances.
“By emphasising [the missed target], MoF would perhaps like to press Mr Abe into an expansion of the corporate tax base in return for a cut in the corporate tax rate,” said Kyohei Morita, chief economist at Barclays in Tokyo.
The forecast underscores tensions over the best way to improve Japan’s fiscal condition, which has steadily worsened over the past two decades amid shrinking tax revenues and rising social security payments. Achieving a balance in the primary budget is a vital first step in tackling long-term debt that is equivalent to about 16 years of tax receipts.
Since taking power just over a year ago, Mr Abe has vowed to use a “flexible” fiscal policy as one of several levers to lift nominal output in the world’s third largest economy. Among his first acts was to unveil a Y10tn fiscal stimulus package, which he followed with another Y5tn of extra spending to smooth the impact of a long-scheduled rise in consumption tax this April.
He also scrapped a 2.55 per cent surcharge on corporate tax for the reconstruction of areas hit by the March 2011 disasters, one year earlier than planned.
But many say more fiscal tightening cannot be put off for much longer. According to MoF’s draft budget for the next fiscal year beginning in April, the government’s primary deficit will stand at Y18tn, on spending of Y73tn, tax receipts of Y50tn and another Y5tn from reserve funds.
That means it may achieve the first part of an international commitment made in 2010, to halve the primary deficit as a percentage of gross domestic product – to 3.3 per cent – by 2015. But a surplus by 2020 will be out of reach, according to last week’s forecast which assumes nominal growth of 3 per cent a year and annual spending cuts of 1.5 per cent.
The forecast also assumes that Japan will follow through with a second increase in consumption tax scheduled for October 2015.
“We know from this estimate that we have lots of things to do,” said a senior MoF official. “Even with economic growth we would not achieve fiscal consolidation, and even with expenditure rationalisation we cannot easily hit the target.”

(BFW) Danthine Says Swiss Property Market Is in ‘Danger Zone:’ Blick

Danthine Says Swiss Property Market Is in ‘Danger Zone:’ Blick
2014-02-02 06:00:00.16 GMT


By Zoe Schneeweiss
     Feb. 2 (Bloomberg) -- Swiss National Bank Vice President
Jean-Pierre Danthine comments in interview with SonntagsBlick.
  * “The real estate market is in the danger zone,” Danthine
    says. “The risk of a correction is large.”
  * Sees “build up of imbalances in the mortgage and the real
    estate market. These could trigger a crisis in case of an
    external shock.”
  * “The world economy has gone through an extremely dangerous
    phase and isn’t yet out of the woods,” Danthine says when
    asked what such a shock could be. “The euro zone remains
    fragile.”
  * NOTE: Swiss govt on Jan. 23 raised capital buffer to rein in
    property market: NSN MZURRS6K50XU <GO>



For Related News and Information:
First Word scrolling panel: FIRST<GO>
First Word newswire: NH BFW<GO>

To contact the editor responsible for this story:
Zoe Schneeweiss at +41-44-2244146 or
zschneeweiss@bloomberg.net

WSJ Jos. A. Banks in Talks to Acquire Eddie Bauer

Jos. A. Banks in Talks to Acquire Eddie Bauer Deal Would Be Latest Twist in Suit Retailer's Takeover Battle Waged on Men's

Jos. A. Bank Clothiers Inc. is in talks to buy fellow apparel retailer Eddie Bauer, according to people familiar with the matter, a deal that, if consummated, would dramatically shake up a takeover battle Jos. A. Bank has been waging with Men's Wearhouse Inc. Details including what price is being discussed couldn't be learned. News of the possible deal comes amid a monthslong, rancorous effort by Jos. A. Bank and Men's Wearhouse, both discount men's suit retailers, to buy each other. Jos. A. Bank announced its intent to buy larger rival Men's Wearhouse in October. After that effort was rebuffed, Men's Wearhouse mounted its own effort to buy Jos. A. Bank, which was in turn rejected. Jos. A. Bank's bid for Men's Wearhouse was backed by private-equity firm Golden Gate Capital, which owns Eddie Bauer. Golden Gate bought Eddie Bauer out of bankruptcy in 2009 for $286 million in cash plus the assumption of hundreds of millions of dollars in liabilities. That Jos. A. Bank is exploring another deal doesn't come as a surprise. The company, which turned down Men's Wearhouse's $1.5 billion offer in December, has said multiple times that it might pursue other takeover targets. In a securities filing in January, Jos. A. Bank said: "The company has been and is continuing to engage in preliminary negotiations that could result in an extraordinary transaction, including the acquisition of a business or assets from a third party that would be material to the company." A person familiar with the matter recently said that Jos. A. Bank has signed nondisclosure agreements related to possible acquisitions of other companies besides Men's Wearhouse. It isn't clear whether the company is seriously pursuing any other deal besides Eddie Bauer. Eminence Capital LLC, which owns big stakes in both Jos. A. Bank and Men's Wearhouse and wants them to combine, filed a complaint in a Delaware court in January seeking to block Jos. A. Bank from making an acquisition that the hedge fund fears would frustrate Men's Wearhouse's effort to buy the company by making it too expensive. Eddie Bauer, founded in 1920, makes casual clothing, sportswear and outerwear for men and women. The retailer has around 370 stores in the U.S. and Canada. The development would be the latest unexpected twist in an often dramatic and unusual mating dance between Jos. A. Bank and Men's Wearhouse. Early in the process, Men's Wearhouse pursued a possible purchase of dress-shoe maker Allen Edmonds, people familiar with the matter have said. Allen Edmonds ultimately sold to a different suitor, but the strategy at the time was viewed by some in the Jos. A. Bank camp as a defensive tactic.