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Fast Retailing drops Barneys bid

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Japan’s Fast Retailing has pulled out of the race to buy US store chain Barneys, clearing the way for Dubai’s Istithmar to acquire the business. Fast Retailing withdrew its bid after Istithmar raised its bid for the clothes retailer to $942.3 million (£462.6 million).

The offer was below Fast Retailing’s $950 million bid, but topped Istithmar’s $825 million offer originally accepted in June. Jones Apparel, Barneys’ parent firm, agreed to Istithmar’s initial offer – pulling out would have cost it $34.7 million. The two contenders have been battling it out since June, when Istithmar’s original offer was given the go-ahead.

Istithmar – a private equity firm that is part of the conglomerate Dubai World – has already made a number of investments in the United States, including the Loehmann’s chain.

Fast Retailing has been successful in Japan through its store chain Uniqlo, specialising in basic, own-brand items of clothing such as t-shirts and jeans.

A Fast Retailing spokesman said there was a “disparity” between the price it would have to pay and the firm’s inherent value. “It is no longer rational from an economic standpoint,” he said.

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