By and  on April 1, 2005

NEW YORK — Four partnerships are forming among venture capitalists eyeing potential bids for Neiman Marcus Group.

Driven by higher acquisition prices in the market, private equity players are getting a lot more cozy as they search for bigger and bigger deals.

Financial sources said the four partnerships, which have already done extensive due diligence in the Neiman sale, are: Thomas H. Lee Partners and Blackstone Group; Kohlberg Kravis Roberts & Co. and Bain Capital Partners; Apollo Advisors and Leonard Green & Partners, and Texas Pacific Group working with an unnamed strategic partner.

Calls to Thomas H. Lee, Blackstone, KKR, Bain, Apollo and Leonard Green for comment were either not returned or officials said that the firm’s policy is not to provide comment.

Bids for Neiman Marcus are expected to be submitted within the next two to three weeks.

Meanwhile, there’s a growing possibility that Saks Fifth Avenue is being eyed as an acquisition target by a consortium of private equity firms. This follows a report in WWD that the Saks Department Store Group is being put on the auction block.

Merrill Lynch analyst Kevin Boler issued a research note saying Saks Inc. — including Saks Fifth Avenue and the department store group — could carry a price tag of $3.5 billion to $4.5 billion. “However, we feel that the company would rather sell the department stores separately and run Saks Fifth Avenue as a stand-alone company,” Boler added.

There are also ongoing murmurs that equity players are teaming up for a leveraged buyout of J.C. Penney, although executives at Penney say the company is not for sale [see related story on page 2].

Private equity players teaming up to scout and then acquire target companies is a bit of a departure from prior years when these types of firms tended to make acquisitions on their own.

One financial source said while the private equity firms are constantly looking for possible opportunities, he doubts many get to the more extensive, due diligence round — the exception being the firms involved with Neiman Marcus.

One of those financial players, The Texas Pacific Group, is said to be showing increasing interest in Neiman’s. “We have absolutely no comment,” said a spokesman for TPG.

To Read the Full Article

Tap into our Global Network

Of Industry Leaders and Designers

load comments
blog comments powered by Disqus