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UPDATE 2-Men's Wearhouse keeps up chase for Jos. A. Bank with higher offer

* Raises offer to $63.50/share from $57.50

Says could raise offer to $65.00 if allowed limited due diligence

* Sues Jos. A. Bank, Golden Gate Capital

* Men's Wearhouse, Jos. A. Bank shares rise as much as 9 pct

(Adds details, timeline; updates shares)

By Maria Ajit Thomas

Feb 24 (Reuters) - Men's Wearhouse Inc pressed on with its bid for Jos. A. Bank Clothiers Inc, boosting its offer by more than 10 percent in spite of the smaller company's effort to stay independent by buying outdoor clothing retailer Eddie Bauer.

Men's Wearhouse raised its cash tender offer to Jos. A. Bank shareholders to $63.50 per share, from $57.50, and added it could increase the offer to $65 if it was able to conduct limited due diligence.

The increased offer values Jos. A. Bank at about $1.78 billion based on its shares outstanding as of Nov. 2, up from about $1.61 billion it offered last month.

Jos. A. Bank shares rose as much as 9.2 percent to $60.14 on the Nasdaq in morning trading. Men's Wearhouse stock rose as much as 8.7 percent to $49.04 on the New York Stock Exchange.

"We believe this offer clearly represents a superior alternative for Jos. A. Bank shareholders compared to remaining independent and acquiring Eddie Bauer," Eminence Capital Chief Executive Ricky Sandler said on Monday.

Eminence Capital is Men's Wearhouse's largest shareholder with a 9.8 percent stake. The company also holds 4.9 percent in Jos. A. Bank.

The amended offer is conditional on the termination of Jos. A. Bank's agreement to acquire Eddie Bauer, Men's Wearhouse said.

Men's Wearhouse urged its rival's shareholders to tender in their shares in order to push Jos. A. Bank's board into resuming merger negotiations.

Men's Wearhouse also said it had filed a lawsuit in the Delaware Chancery Court alleging that the Jos. A. Bank board breached its fiduciary duties to shareholders by adopting measures to "thwart" Men's Wearhouse's tender offer.

Under the lawsuit, Men's Wearhouse said it seeks to prevent Jos. A. Bank from proceeding with the Eddie Bauer acquisition and wants the Jos. A. Bank board to revoke its poison pill.

"The Eddie Bauer transaction has little to do with the long-term welfare of Jos. A. Bank, and has everything to do with the short-term interest of the Jos. A. Bank board," Men's Wearhouse said in its complaint.

Men's Wearhouse has also named affiliates of Golden Gate Capital, the ultimate parent of Eddie Bauer, in the lawsuit. Golden Gate had supported an earlier bid by Jos. A. Bank to acquire Men's Wearhouse.

Jos. A. Bank and Golden Gate Capital were not immediately available for comment.

Men's Wearhouse and Jos. A. Bank - both of whom are known for renting and selling tuxedos - have made and spurned offers for each other over the past few months. In January, Men's Wearhouse took its increased bid of $1.61 billion directly to Jos. A Bank shareholders.

Men's Wearhouse also said on Monday that the expiration of its amended tender offer has been moved forward to March 12 from March 28.

(Reporting by Maria Ajit Thomas in Bangalore; Editing by Sriraj Kalluvila and Joyjeet Das)