Jones Apparel Group Inc. said on Wednesday it agreed to sell its Barneys New York chain to Istithmar for a sweetened price of $942.3 million after the Dubai-owned firm raised its offer in a bidding war with Japan's Fast Retailing Co. Ltd.

Under the terms of the amended purchase agreement, Fast Retailing, owner of the Uniqlo chain, has until 5:00 p.m. EDT on Thursday to make another offer.

If Fast raised its bid and Jones accepted it, the apparel company would have to pay Istithmar a termination fee of $34.7 million.

(Reporting by Martinne Geller)

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