By  on May 5, 1994

MILAN -- GFT might not be so mad about Plaid.

As speculation mounted here this week that the deal for Plaid Clothing Group to acquire GFT might be running into problems, another name has resurfaced as a possible suitor for the Italian designer label producer.

Gemina SpA, an Italian holding company controlled by the Agnelli family's Fiat SpA industrial group, had been mentioned earlier as possibly interested in buying GFT, but this week its name was again being cited by sources close to the company.

On Wednesday, Gemina formally said it had no interest in GFT, as did a sister company, Fila SpA, an Italian sportswear maker controlled by Gemina and listed on the New York Stock Exchange.

Nevertheless, one GFT source said Gemina has, in fact, reemerged as a viable alternative to Plaid, which is currently conducting due diligence on GFT and is seeking to buy the company for $242 million (400 billion lire).

Speculation that Gemina/Fila might be GFT's latest suitor intensified after news surfaced that Plaid's bid might have run into a serious hurdle. As reported, Plaid made a special request to GFT's creditor banks to extend its exclusive right to negotiate with GFT beyond May 15, the deadline established in Plaid's March 9 letter of intent.

GFT's Italian creditor banks reportedly agreed to the extension, but on the condition that Plaid delete the "price adjustment" clause in the letter of intent that allows Plaid to modify its offering price after completing due diligence.

Although sources familiar with the talks have indicated that the Plaid-GFT negotiations are proceeding normally, others say that a GFT-Gemina marriage might make more sense.

For starters, there is mounting speculation that an Italian buyer would be more acceptable to everybody involved -- from the Rivetti family (which controlled GFT until it slipped into the hands of the banks) to current GFT management to Mediobanca, the Milan merchant bank that is masterminding GFT's financial rescue.

Some observers argued, however, that such a nationalistic approach isn't realistic in what has become a global business. Furthermore, one Italian group, the neighboring Miroglio, pulled out last year after taking a closer look at GFT's balance sheet.

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