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Jones Apparel agrees to sell Barneys NY to Istithmar

23 Jun '07

3 min read

Jones Apparel Group Inc announced that it has entered into a definitive agreement to sell its wholly owned subsidiary Barneys New York Inc to an affiliate of Istithmar, a Dubai based private equity and alternative investment house for $825.0 million in cash, subject to certain purchase price adjustments.

Peter Boneparth, President and Chief Executive Officer, Jones Apparel Group Inc stated, "We are very pleased to enter into this transaction, which realizes significant value for our investment in Barneys and provides us with the opportunity to use the net proceeds to enhance shareholder value."

"Furthermore, going forward, because the sale will reduce the level of required capital expenditures we will have greater financial flexibility in the execution of our business strategy."

The Company expects to report a net gain from this transaction of approximately $290.0 million. In light of available tax benefits, the Company anticipates net cash proceeds after taxes and transaction expenses of approximately $770.0 million.

These amounts are subject to change, based on the actual balance sheet of Barneys at closing and certain purchase price adjustments.

The Company is considering several alternatives for the use of the proceeds, including among other things, the return of a substantial amount of capital to shareholders, the repayment of some of its outstanding short- term indebtedness and other uses consistent with the Company's business strategy.

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