Putnam doubles stake in clothier

Jos. A. Bank revised stockholder rules

September 11, 2007|By Andrea K. Walker | Andrea K. Walker,SUN REPORTER

Jos. A. Bank Clothiers Inc. announced yesterday that Putnam Investments had more than doubled its stake in the men's clothing chain to a little more than 10 percent, making it the company's largest institutional investor.

The announcement came a few days after the board of directors at the Hampstead-based clothier adopted a new "stockholder rights plan," making it more difficult for a company to launch a hostile takeover. Company executives said the change was not a so-called "poison pill," which sometimes is put in place when executives fear another firm is collecting shares to gain corporate control.

Jos. A. Bank Chief Executive Officer Robert N. Wildrick said the company didn't know Putnam had bought more shares when Bank changed the plan, which was to expire Sept. 19. And Wildrick, who has not talked with Putnam executives about the increased stake, said he didn't know of any companies looking to take over the clothing company.

"It's basically an extension of something that already existed," Wildrick said of the changes that were announced late Friday. "It was an administrative decision."

Putnam executives, who could not be reached yesterday, are increasing their ownership in Bank from 4.4 percent to 10.3 percent, or from 796,150 shares to 1.9 million shares. Several analysts said Putnam is typically a passive investor and likely chose the stock to bolster its various investments, which include retirement and college savings funds.

Other major investors in Jos. A. Bank include Munder Capital Management Inc., which owns 9.43 percent; Wellington Management Co. LLP, which owns 8.85 percent; and Fidelity Management & Research Corp., which owns 7.02 percent.

Bank said the changes it put in place, which are directed at shareholders who collect 20 percent or more of its stock, would not prevent a takeover but are designed to encourage investors buying more shares of the company to negotiate with the board of directors. It also said the change was not in response to any specific proposal.

Those familiar with poison pills and other plans designed to stave off hostile takeovers said they are common tools that most companies put in place during routine decision-making among the board of directors.

"They've been around for a long time," said Donald Margotta, an associate professor of business at Northeastern University in Boston, who has been an expert witness in cases involving poison pills. "It's a myth that companies only adopt them when" they think someone is going to take them over.

Bank shares fell 15 cents to close at $28.35 on the Nasdaq yesterday.

Also yesterday, Fidelity Investments said it increased its stake in television station owner Sinclair Broadcast Group Inc. to 12 percent, according to a filing with the Securities and Exchange Commission.

The purchase of 6.8 million shares marks a substantial increase in Fidelity's previous holdings of 1.38 million shares. The Boston-based investment group declined to comment on the move in keeping with its policy of not discussing investments in individual stocks.

A spokesman for Sinclair was unavailable yesterday.

In its regulatory filing, Fidelity indicated the shares were not purchased with the intent to influence control of the Hunt Valley company, which is majority owned by David Smith, chairman and chief executive, and his brothers, Frederick, Duncan and Robert. The Smith brothers collectively control 82 percent of the voting shares at Sinclair, according to SEC filings.

The company's shares fell 3 cents on the Nasdaq to close at $12.08 yesterday.

andrea.walker@baltsun.com

Sun reporter Paul Adams contributed to this article.

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