Dubai investment firm Istithmar said yesterday it has upped its bid for US upscale retail chain Barneys New York to US$900 million, matching a rival bid by Japan-based Fast Retailing Co Ltd.
The wrangling marks the latest twist for Barneys, a celebrated New York retailer started in 1923 by Barney Pressman, which went through bankruptcy in the 1990s.
Istithmar, the Dubai government's investment arm specializing in private equity deals, "has revised its offer to acquire Barneys New York, the luxury specialty retailer, from Jones Apparel Group Inc at a purchase price of US$900 million and under competitive terms in the share purchase agreement," a statement said.
"If this offer is not accepted Istithmar is entitled to our break-up fee of US$22.7 million," the statement said.
Jones Apparel Group said last month that it had received an unsolicited US$900 million offer from Fast Retailing two weeks after initially agreeing to sell Barneys for US$825 million to Istithmar.
On Wednesday, Jones Apparel Group said in a statement that its board had backed the Fast Retailing offer and informed Istithmar of its intention to accept it unless the Dubai firm can match the offer.
It said it would pay Istithmar a termination fee of US$22.7 million for scrapping the deal signed in June.
Under the Jones group, Barneys operates flagship stores in New York, Beverly Hills, Chicago, Boston and Dallas as well as several regional "warehouse" stores and others under the Barneys Co-Op name.
Istithmar had previously argued that the deal it signed with the Jones Apparel Group was "definitive."
Fast Retailing is aiming to overtake industry leaders such as Zara and Sweden's Hennes and Mauritz (H&M) to become the world's top seller in casual wear.
Its Uniqlo brand flourished during Japan's decade-long slump in the 1990s by selling cheap yet good quality clothing, most of which was manufactured by Chinese factories.
The chain has since branched out in China and Britain as well as France.
Istithmar is owned by Dubai World, a conglomerate which is in turn owned by the government of the Gulf emirate of Dubai, one of the seven members of the United Arab Emirates (UAE).
Its bid for Barneys follows a series of investments in the US. In May last year, the firm announced it had bought for US$300 million the Loehmann of New York chain of shops which had gone bankrupt seven years earlier.
In June the same year, Istithmar revealed that it had bought a 32-story building located in Manhattan for US$1.2 billion.
Last October the company said that it acquired the W Hotel Union Square in Manhattan for US$285 million.
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