Dubai-based private equity firm Istithmar raised its offer to acquire Barneys New York Inc. from Jones Apparel Group Inc. to $900 million on Sunday, matching a bid by Japan's Fast Retailing Co. Ltd.
Istithmar, owned by the government of Dubai, had agreed to buy the luxury retailer for $825 million before Fast Retailing entered the fray with a $900 million offer.
On August 1, Jones gave Istithmar three days to sweeten its bid.
If this offer is not accepted, Istithmar is entitled to our break-up fee of $22.7 million, the Dubai-based agency said in a statement.
Istithmar could consider launching Barneys New York in markets such as China and the Middle East if it completes the deal, Istithmar Chief Executive David Jackson told Reuters last month.
Jones agreed to buy Barneys in 2004 for $400 million, moving a company that supplied clothes and shoes to mall department stores and discounters into the luxury retailing market.
Jones, which owns clothing, shoes and accessories brands such as Nine West, Gloria Vanderbilt and Jones New York, put itself up for sale last year but failed to find a buyer. It agreed to sell Barneys in June after several months of negotiations.
Under a June agreement with Istithmar, Jones Apparel's management can explore bids for the whole company through August 11.
Barney's could be Fast Retailing's biggest purchase to date.
Having built a chain of more than 700 stores in Japan, the Tokyo-based company plans to expand abroad, investing as much as 400 billion yen ($3.4 billion) on acquisitions to almost double its annual sales to 1 trillion yen by 2010.
Istithmar's investments on behalf of the Dubai government include a stake in Standard Chartered Plc. and buying luxury liner Queen Elizabeth 2.