DUBAI, 6 August 2007 — Private-equity firm Istithmar, the investment arm of the Dubai government, yesterday raised its offer to acquire Barneys of New York to $900 million, matching a bid from Japan’s Fast Retailing Co. for Jones Apparel Group Inc.’s luxury-retail chain. Istithmar had earlier offered $825 million for Barneys.
Jones Apparel had mentioned on Wednesday that it would accept Fast Retailing’s offer for Barneys unless Istithmar, sweetened its $825 million bid within three days, to at least match the rival offer.
Jones Apparel now has to decide which offer to accept, but will have to pay Istithmar a break-up fee of $22.7 million if it sells to Fast Retailing. Istithmar has said that if its bid is successful it will look to expand the brand internationally, and would consider Dubai as a potential location.
Istithmar, a private equity and alternative investment house headquartered in Dubai with offices in Shanghai and New York, which has bought New York properties including the W Hotel Union Square, plans to spend about $1.7 billion this year on assets in retail, industrial and financial-services companies. Istithmar’s investments include a stake in Standard Chartered and buying luxury liner Queen Elizabeth 2. In May 2006, the firm announced it had bought for $300 million the Loehmann of New York chain of shops which had gone bankrupt seven years earlier.
Established in 2003, Istithmar has invested in over 30 companies in three sectors — consumer, industrial and financial services — deploying in excess of $1.6 billion of capital.