The Barneys bidding war intensifies

Posted Aug 6th 2007 12:18PM by Beth Gaston Moon
Filed under: Deals, Competitive Strategy, Jones Apparel Group (JNY)

The value of luxury retailing chain Barneys New York, currently owned by Jones Apparel Group (NYSE: JNY), just got a little steeper. Over the weekend, Japan's Fast Retailing Company said it would pay $950 million to acquire the Barneys chain. Since July 5, Fast Retailing has been trying to beat out Dubai investment group Istithmar, which originally offered $825 million for the chain but has since upped its bid to $900 million.

The latest offer is 15% higher than Istithmar's original acquisition price and nearly 140% above what Jones paid to buy-out Barneys in December 2004.

Jones Apparel officials have responded by saying Istithmar has two business days to respond with an offer that, according to a statement published by the Associated Press, is "at least as favorable to Jones as the amended Fast Retailing offer." If Jones decides to deal with Fast Retailing, it will owe the Dubai suitor a $22.7 million break-up fee.

Jones shares have dropped more than 2% today to hit a new 52-week low of $19.79. The stock may be continuing to real from its disappointing earnings report last week.

Beth Gaston Moon is an analyst at Schaeffer's Investment Research.

Tags: Barneys New York, BarneysNewYork, Dubai, Fast Retailing, FastRetailing, inthenews, Istithmar, JNY, Jones Apparel, JonesApparel