Bidding War for Barneys Heats Up

The battle for Barneys, the luxury menswear chain, heated up over the weekend after Dubai's Istithmar boosted its $825M bid for the retailer to $900M. That offer was quickly surpassed by Japan's Fast Retailing Co., which increased its $900M bid to $950M. Jones Apparel, which owns Barneys, said Istithmar has until August 8 to make another offer "at least as favorable" as the Fast bid. The bidding for Barneys started in late June, and under the agreement with Istithmar, Jones can explore bids for the whole company through August 11. If Jones ends the deal with Istithmar to accept the Fast bid, Jones would be required to pay the Dubai firm a $22.7M termination fee. If Istithmar succeeds, it likely would open stores in China, the Middle East and emerging tourist locations such as Macau. Jones bought Barneys in 2004 for $291.3M and $106M in debt. Fast is Asia's biggest clothing retailer.

Sources: Bloomberg, Reuters, Wall Street Journal, MarketWatch
Commentary: Jones Apparel Gets Unsolicited $900M Counter-Bid for Barneys • Jones Apparel Group: No Catalysts In Sight to Boost Ailing Stock • Jones Apparel: Room to Grow -- Barron's
Stocks/ETFs to watch: JNY. Competitors: ANN, BWS, LIZ. ETFs: RTH

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