MILAN -- CVC Capital Partners upped the ante in the increasingly bizarre negotiation for control of Italian designer apparel maker GFT SpA with an announcement late Friday that it has reached an agreement with Giorgio Armani in the event it succeeds in buying GFT.

The news came just as Plaid Clothing Group PLC, which has an exclusive right to negotiate for GFT, appeared to be near closing the acquisition of the Italian company before the end of the month.

As reported, Armani has already renewed his licensing agreement with GFT for the next four seasons, a basic guarantee requested by Plaid before it went forward with its bid.

According to a statement issued by CVC, a Milan-based venture capital firm associated with the Citicorp banking group, CVC and Armani have reached an agreement effective only if CVC completes the acquisition of GFT. CVC announced a week ago it had made an independent bid for GFT after failing to reach an agreement with another GFT suitor, Mexican entrepreneur Fabio Covarrubias.

The CVC statement said the accord will strengthen ties between GFT and Simint SpA, the manufacturer of the Armani jeans line. Simint is badly in need of fresh capital.

One source said that if CVC buys GFT, CVC has agreed to invest 30 billion lire ($19 million) in Simint through GFT, thereby creating a direct shareholder relationship between the two firms.

On Saturday, Simint announced a consolidated loss of 222 billion lire ($141 million) for the year ending April 30, on sales of 266 billion lire ($169 million). Simint chairman Massimo Varazzani also announced his resignation, citing the company's continued problems and the need for a complete restructuring.

A CVC spokesman said that if its bid is successful, former GFT managing director Clemente Signoroni would not only return to his post, but would become a GFT shareholder. CVC would commit to keeping the management of GFT Italian and would bring GFT to the Italian stock market once the recovery is complete, the spokesman said.

News of the agreement between CVC and Armani provoked an angry response from Valentino, another of the top designer labels produced by GFT. Valentino's managing director, Giancarlo Giammetti, said in a statement issued Saturday that news of Armani's support of the CVC bid, "leaves me extremely worried.""It seems unacceptable that the efforts to restructure an important textile group such as GFT are conditioned by interests of a personal nature, such as the restructuring of Simint, a company that is controlled by Armani and has nothing to do with GFT," Giammetti said.

He further criticized CVC's proposal to return Signoroni to his post should they acquire the apparel giant.

"The candidacy of Clemente Signoroni as managing director seems -- outside of his undoubtable capacities -- premature, considering he recently resigned from the very same position," Giammetti said.

Valentino, whose collections make up about 200 billion lire of GFT's sales, "has the legal right to approve GFT's new partner and intends therefore to make sure that the future shareholding makeup of the company is carried out solely in the interests of restructuring and relaunching GFT," Giammetti added.

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