* Jos. A. Bank rejects $1.5 bln takeover bid
* Says will consider "strategic acquisition opportunities"
* Men's Wearhouse may seek to nominate directors to Jos. A. Bank board
* Shares of both companies fall about 1 pct
By Aditi Shrivastava
Dec 23 (Reuters) - Jos. A. Bank Clothiers Inc has rebuffed a $1.5 billion takeover bid by Men's Wearhouse Inc , prompting its larger rival to explore other ways to satisfy investors' hunger for a merger of the suit retailers.
Shares of Men's Wearhouse fell about 1 percent on Monday after Jos. A. Bank rejected its offer, the latest move in a protracted battle between two retailers intent on playing the lead role in the creation of a combined entity.
"I expect this tug-of-war to persist for some time," Anthony Michael Sabino, a professor at St. John's University's Peter J. Tobin College of Business, told Reuters.
Fremont, California-based Men's Wearhouse last month offered $55 per share for Jos. A. Bank, turning the tables on its smaller rival only weeks after Jos. A. Bank had bid for Men's Wearhouse.
The retaliatory offer from Men's Wearhouse - an unusual tactic known as the Pac-Man defense after a 1980s video game - followed pressure to merge from its largest shareholder, New York-based hedge fund Eminence Capital LLC.
A combined company would have 1,700 stores that sell suits and rent tuxedos, a scale that has in the past raised antitrust questions about a merger.
In a statement on Monday, Jos. A. Bank said its board had unanimously rejected the offer.
"Our board undertook a thorough review and determined that the per-share consideration in the proposal made to us by Men's Wearhouse was simply not in the best interest of our shareholders," said the company's chairman, Robert Wildrick.
Within two hours, Men's Wearhouse issued a statement expressing its "surprise" at the rejection, adding that it would consider all of its options "to make this combination a reality."
Men's Wearhouse said it would consider nominating director candidates at Jos. A. Bank's next annual shareholders' meeting. The date of this meeting has not yet been announced.
"Each company is stubbornly holding on to its independence, and neither has made an offer that overwhelms its target's shareholders," Sabino said.
"The game changer will be in the New Year, when we see their respective results for the holiday season."
Jos. A. Bank, a century-old seller of men's tailored and casual clothing, said in the statement it would consider "strategic acquisition opportunities" but did not give details.
"Jos. A. Bank has been perusing other alternatives for 10 years, so I question the attractiveness of other alternatives," Stifel Research analyst Richard Jaffe told Reuters.
"The initial rejection by Jos. A. Bank was the appropriate decision, and perhaps a negotiating tactic," he said.
Jos. A. Bank, which has more than 600 stores in the United States, said this month that its comparable-store sales rose in November after its discounts won favor with shoppers.
Men's Wearhouse operates more than 1,100 stores under the Men's Wearhouse, Moores and K&G banners.
Third-quarter comparable store sales at the company's Men's Wearhouse stores - which account for about two-thirds of total sales - rose 2.6 percent.
The last person to push Men's Wearhouse to sell itself was its founder, George Zimmer, known to U.S. television audiences for his advertising catch phrase, "You're going to like the way you look - I guarantee it."
Zimmer was ousted in June after arguing for a sale of the company to an investment group. At the time, he accused the board of trying to silence him for expressing concerns about the direction of the company he founded 40 years ago.
Brian Sozzi, chief executive of Belus Capital Advisors, said he believed the latest offer by Men's Wearhouse was a "very fair deal" that would provide a degree of certainty for Jos A. Bank in a business with limited growth prospects.
"When the team at Jos A. Bank moves beyond its eggnog-induced hangover and hurt feelings, I suspect the two companies will merge as it's necessary to prepare both businesses for the future of retailing," he said.
Men's Wearhouse shares were down 0.9 percent at $51.54 on the New York Stock Exchange. Jos. A. Bank's Nasdaq-traded stock was down 0.7 percent at $56.64, but still above the offer price of $55.