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Jones Apparel completes sale of Barneys New York

08 Sep '07

4 min read

Jones Apparel Group Inc announced that it has completed the sale of its indirect wholly owned subsidiary Barneys New York Inc and has entered into an accelerated share repurchase agreement with Goldman, Sachs & Co to utilize a portion of the proceeds from the sale.

Jones received an aggregate of approximately $945 million in cash at closing from the sale of Barneys to an affiliate of Istithmar PJSC, a Dubai based private equity and alternative investment house. The purchase price is subject to certain post-closing adjustments.

Jones expects to realize estimated after-tax proceeds, net of transaction expenses, of approximately $840 million from the sale. The proceeds of the sale will be used to fund the ASR program, to repay short term borrowings and for other corporate purposes.

Under the ASR agreement, Jones will repurchase $400 million of its outstanding common stock, with approximately 15.5 million shares to be received by September 12, 2007 and the remaining shares to be received at the end of an initial valuation period and upon final settlement of the ASR program.

Final settlement of the ASR program is scheduled for no later than July 19, 2008, and may occur earlier at the option of Goldman or later under certain circumstances. The initial shares repurchased by Jones are subject to adjustment if Jones were to enter into or announce certain types of transactions.

Wesley R. Card, President and Chief Executive Officer, stated,"The repurchase of our stock is a compelling investment opportunity and reflects the Board's confidence in the future of Jones. We received substantial value for our investment in Barneys, and we are pleased to return that value to our shareholders through this ASR program."

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