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The Barneys bidding war intensifies

Beth Gaston Moon — Mon, 06 Aug 2007 12:18:00 EST

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.

The Barneys bidding war intensifies originally appeared on BloggingStocks on Mon, 06 Aug 2007 12:18:00 EST. Please see our terms for use of feeds.

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Jones' Barneys New York bids grow

Eric Buscemi — Thu, 05 Jul 2007 12:55:00 EST

Filed under: Deals, Rumors, Jones Apparel Group (JNY)

It's possible that Istithmar, the private-equity arm of the Dubai government, is grimacing today, after news of a higher bid for Jones Apparel Group Inc's (NYSE: JNY) Barneys New York unit surfaced. Under the terms of their agreement, Jones is allowed to weigh other offers for the Barneys unit until July 22 and can explore bids for the entire company through August 11. Jones said Thursday it received an unsolicited bid from Japanese clothing company Fast Retailing Co Ltd to acquire Barneys for $900 million. That's a 9% premium over Istithmar's $825 million offer.

Fast Retailing, which owns stores in more than 12 countries, says owning Barneys New York would increase its market diversification and boost its revenue. The company recently expanded its Uniqlo casual clothing into the U.S., and said last year it would target the U.S. retail market for acquisitions. Fast Retailing sees "potential top-line synergies" in buying Barneys.

For Jones, though, analysts believe the upscale unit has allowed Jones to "lessen its dependence on selling its wholesale lines to department stores." Should Jones decide to break up the in-place deal with Istithmar, it will have to pay Dubai a $20.6 million breakup fee, or $22.7 million if terminated after July 22. So far, however, the deal is still on the table.

Either way, a purchase of Barneys would show the increasing desire for upscale retail, and the increasing desire of companies from countries like Dubai and Japan to further expand into the U.S. market.

Don't feel too badly for Istithmar if their Barneys deal falls through. The firm also reportedly has interests in clothing retailer Loehmann's Holdings, various commercial buildings in New York and London, and investment bank Perella Weinberg Partners.

Jones' Barneys New York bids grow originally appeared on BloggingStocks on Thu, 05 Jul 2007 12:55:00 EST. Please see our terms for use of feeds.

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Barneys New York sale coming soon?

Eric Buscemi — Fri, 22 Jun 2007 12:05:00 EST

Filed under: Deals, Rumors, Nordstrom, Inc (JWN), Jones Apparel Group (JNY)

Analysts are expecting Jones Apparel Group Inc (NYSE: JNY) to announce a sale of upscale fashion retail chain Barneys New York any minute now. Sources have indicated Jones CEO Peter Boneparth is looking to sell the chain because of a decline in the company's stock price -- shares closed yesterday at $28.36, while trading in January for over $35. Additionally, having failed to sell the entire company nearly a year ago, Mr. Boneparth may be looking to take advantage of the highly competitive market for luxury goods.

Because of the desire for luxury goods, Barneys has been sought after by publicly-traded companies as well as private-equity groups. There is strong market speculation that Istithmar, the investment arm of the Dubai government, could be the victor in the race for Barneys. Istithmar has a global real estate portfolio valued around $7 billion, including owning apparel retailer Loehmann's Holdings, and has been in hot pursuit of other U.S. properties over the past year. Sources close to the matter believe Istithmar could offer around $825 million for Barneys.

In addition to Istithmar, rumors swirled recently that Neiman Marcus and Nordstrom Inc (NYSE: JWN) had been interested in the chain and considered making bids around in the $800 million to $850 million range price, but dropped out when both companies believed the price would escalate too high, perhaps as far as $1.4 billion.

A sale of Barneys would likely come, as the New York Times reported, as a "partial victory" for Mr. Boneparth. He had been oft criticized that he paid too high a price in 2004 for the chain, but may have the last laugh if the sale price turns out to be nearly twice as high.

Barneys New York sale coming soon? originally appeared on BloggingStocks on Fri, 22 Jun 2007 12:05:00 EST. Please see our terms for use of feeds.

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