NEW YORK — It all fell apart at the last minute.VF Corp.’s efforts to strike a fast deal this week to acquire Calvin Klein Inc. and Warnaco apparently were squashed by the designer himself and by Warnaco’s board late Tuesday night.So both CKI and Warnaco appear to be back at square one, and the bidding race is on again. VF still is seen as a contender for the two companies, while Phillips-Van Heusen is also said to be back on the scene as a potential bidder. Even Calvin Klein himself has once again emerged as a possible buyer of his Warnaco licenses.Following a flurry of rumors about VF’s aggressive interest in acquiring the company this week, Warnaco Group responded to the concerns of its bank debt holders by telling them that it was not pursuing any sale and that the bankrupt company would stick to its approved plan of reorganization, creditors and analysts said on Wednesday."We are continuing to pursue our standalone plan of reorganization and expect to emerge in early 2003," a Warnaco spokesman said.VF’s negotiations with Warnaco were contingent on a deal with CKI, one source said, and Klein’s rejection of its proposal for CKI effectively killed the deal. But why that happened remained a mystery Wednesday, with some Warnaco and Klein experts speculating once again that Klein might be pooling his own resources to try to buy back his jeans and underwear lines, or that the move was rooted in his concerns for the legacy of the brand and his desire to partner with a luxury-oriented business rather than a middle-market company.It also could not be learned whether Warnaco’s rejection of the VF offer was related to Klein’s decision.Regardless, there now appears to be little chance that a deal to acquire Warnaco or any of its brands would take place before the completion of its reorganization, which could be effective by late January. One of the owners of Warnaco’s bank debt said that was advantageous from his company’s point of view, feeling that VF’s offer was a predatory move to acquire an undervalued brand and that the Calvin Klein businesses could be worth a lot more, post-bankruptcy.A source at Warnaco said Wednesday that "we are not pursuing any sale of the company," but that apparently became its policy after a deadline for potential suitors, including VF, to come up with a serious offer passed without a proposal that was acceptable to its debt holders. So Warnaco took the company off the table, but once it emerges from Chapter 11 and has a new chief executive officer, chief financial officer and directors in place, sources said it might then entertain offers.Tony Alvarez, the ceo hired in November 2001 to lead the company through its bankruptcy, is expected to return to the turnaround firm Alvarez & Marshal after a completed reorganization. His compensation at Warnaco includes an incentive bonus package tied to its emergence from Chapter 11 that includes $1.95 million in cash, senior subordinated notes worth $940,000 and 0.59 percent of its newly issued stock, worth $2.8 million. But a potential acquisition or a bidding war for the reorganized Warnaco would logically push the value of newly issued stock much higher, benefiting both the former debt holders and Alvarez.Warnaco filed its amended plan of reorganization last month. As reported, unsecured creditors are expected to receive 7.2 cents on the dollar for their claims on a pro rata share. The firm said in its SEC filing it expects to file for an extension of its exclusive period to obtain acceptances of the plan through and including Jan. 6, 2003. A confirmation hearing is still set for Jan. 16 before the Manhattan bankruptcy court. Wednesday’s developments do not preclude VF from coming back to CKI or Warnaco with another offer, but it also means that PVH, which was said to have been knocked out of the earliest round of bidding, might be able to come back for a round two, or that Klein could team up with a European investor or any of his wealthy friends to finance his own takeover effort, similar to what happened in 1992 when entertainment tycoon David Geffen bailed Klein out of financial troubles, buying junk bonds issued by the Klein company with a face value of $55 million at a discount and paying about $35 million.Klein and his business partner, Barry Schwartz, each own 43 percent of the CKI business, and are said to be actively pursuing the best deal for the company that would bring in the financing necessary to meet its future goals. They could not be reached Wednesday, while Tom Murray, president and chief operating officer of CKI, would only say, "I cannot discuss anything at the moment."Asked Wednesday if VF intended to buy CKI, chief executive officer Mackey McDonald replied from the company’s New York office that he was not "at liberty to discuss" the issue. Nor would he elaborate whether VF is interested in exclusively acquiring the CK underwear and jeanswear licenses, or for that matter, whether there was a reason that would prevent VF from consummating such a deal.Industry observers, though, generally believe that VF would not be the appropriate parent for an upscale sportswear company such as CKI, since VF’s core businesses have consistently been intimate apparel, jeanswear, daypacks, and knit products.But for a year, VF is said to have been keenly interested in buying the coveted Calvin Klein Underwear and Jeanswear businesses. According to one source familiar with the negotiations, even though VF already has Tommy Hilfiger Intimates, "Getting CK Underwear would be a great coup. The CK Jeanswear business would be the icing on the cake. VF needs a designer jeanswear license to compete with the likes of Liz, DKNY, Ralph, and the rest of the pack."As for interest in CKI, it seems unlikely that VF would make an effort to take over a specialized designer business without acquiring the bread-and-butter denim and underwear businesses as well. But there continues to be a long list of suitors who could step up to the plate, depending on what Klein and Schwartz determine their intentions will be. These include Lawrence Stroll and Silas Chou and François Pinault.

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