Private Equity News & Analysis

Istithmar triumphs in $942m Barneys bid(2)

Dubai-based Istithmar has had its third bid accepted in the battle for high-end department store Barneys New York, as rival bidder Fast Retailing, a Japanese company, pulled out of the bidding.

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The bidding for Barneys New York, the department store to New York’s glamour set, took a dramatic turn as Dubai-based Istithmar raised its agreed bid a second time to $942 million (€684 million), forcing rival Japanese bidder Fast Retailing out of the bidding.

The Japanese company had until 17.00 EDT today to table a rival bid to raise its $950 million bid sufficiently for selling company Jones to trigger the cancellation fee of $34.7 million on its deal with Istithmar.

However, Fast Retailing said in a statement today it had pulled the $950 million bid it had tabled last week.

Istithmar originally bid $825 million in June. Fast Retailing challenged it with a $900 million offer, which Istithmar matched. The Dubai-based firm raised its offer yesterday after Fast Retailing made its second bid.

Buyout firms have been increasingly involved in the bidding for department stores worldwide, which have proved popular due to the sale and leaseback opportunities offered. A KKR-led consortium walked away from the bidding for Australian retailer Coles. However, other successful bids include Lion Capital’s acquisition of Dutch department store Hema from private equity owned Maxeda. 

Prestigious department stores such as Barneys are also attractive to buyers interested in expanding the brand.