NEW YORK — Cerberus, an investment firm here with an $8.5 billion fund and a hankering for acquiring middle-market distressed businesses, is said to be closing in on the purchase of Fila.

Sources said Thursday the company initially made a bid last fall and is now "pretty far down the road" in terms of wrapping it up. Cerberus executives have recently been spotted in Biella, Italy, where Fila is headquartered. Some say a deal could be completed within a few days or a month. "By June" is the official word from Fila, which declined further comment.

Executives at Holding di Partecipazioni Industriali, Fila’s parent, declined to elaborate. Fila has been for sale since June 2001 and has more than $300 million in debt. HdP has been selling its fashion interests to focus more on its publishing operations.

HdP management is looking for cash, and is not interested in a buyer that would file for bankruptcy and leave HdP financially responsible, one source said.

Cerberus, which is the name of a three-headed dog in Greek mythology, is known to seek out bargains in companies with weak balance sheets, but fairly solid operations and/or strong market positions. Executives at Cerberus declined to comment.

Meanwhile, Nike and Continental Partners are said to be on the sidelines, should Cerberus’ bid be rejected. This month, Nike’s estimated $429 million offer was shot down since negotiations with Cerberus were too far along and Nike’s due diligence would take some time.

A Nike spokeswoman said Thursday the company does not comment on rumors or speculation.

Industry sources questioned why Nike would be interested in Fila, a $900 million brand that has lost money every year since 1998. Some suggested Nike wanted a down-market brand to sell to mass merchants just as Starter sells to Wal-Mart. Others said Nike founder Phil Knight is frustrated by how Adidas and Puma have made inroads with designer-oriented customized products for style-conscious customers, and is looking for a label with which to do more fashion-oriented looks. There was also speculation that Knight wanted the brand to eliminate it, and that possibility was rumored to have concerned HdP management.

Nike’s bid did nothing for Wall Streeters, who were worried the acquisition would distract the sports apparel and footwear giant from its core business, one source said. "The Street would not appreciate that much," he said. "It makes more sense for someone to do a Converse-type deal. Converse’s owners market it as a separate entity and never get involved with the infrastructure."Continental Partners, which bid on Fila in the summer of 2001 and had an exclusivity agreement at one point, reportedly remains interested. Steve Wynn, former chief executive officer of Adidas, is said to be part of Continental Partners’ management team.

Executives at Continental Partners could not be reached for comment.

Fila’s Italian management is concerned Cerberus would sell pieces of the company and licenses, shut down European operations and maintain its U.S. office in Sparks, Md., sources said. Certain members of Fila’s board are supposedly upset about the prospect of the brand losing its Italian heritage and expect Cerberus to eliminate any Italian presence within a year, they said.

Jon Epstein, president and chief executive officer of Fila USA is said to be in good favor with Cerberus and is expected to maintain his role at the company. Epstein could not be reached to comment.

HdP executives are apparently turning up the heat to get the Cerberus deal done. "There’s a fair amount of pressure from HdP to get something done," one source said.

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