MILAN — An offer by the Plaid Clothing Group to acquire GFT is much more open-ended than previously reported, according to information obtained late Friday by WWD.
According to sources, Plaid has presented a letter of intent to buy GFT SpA for $237 million (400 billion lire) at current exchange rates. The offer was made to the Italian banks that control the indebted, Turin-based apparel producer.
Plaid, a U.S. men’s wear manufacturer, has also put down a $7.2 million (12 billion lire) deposit on GFT, but an “exclusive” clause in the deal was removed, according to sources familiar with the negotiations.
“The banks took that right out,” said one source.
Furthermore, contrary to previous reports, Plaid’s offer is now subject to due diligence, which was started last Monday, sources said.
Sources also indicated that the financial picture of GFT that emerges after due diligence could well prompt Plaid to revise its initial offer.
Officials at Plaid could not be reached for comment, but a spokesman said the company expects to release the details of the letter of intent today.
GFT managing director Clemente Signoroni, reached in New York Friday, where he was in meetings with Plaid, said, “It isn’t possible for me to talk about the shareholder situation. I have to focus on the performance of the company, and from that standpoint, things are comforting.”
Under terms of Plaid’s letter of intent, dated March 9, the whole deal could be called off by either Plaid or GFT, under certain conditions, if a definitive agreement has not been executed by May 15.
The letter of intent will expire if it isn’t approved within 30 days by the Italian banks holding GFT’s debts, according to sources.
In another significant twist, the deal is also contingent on Plaid’s ability to arrange financing, sources indicated.
As reported, Plaid emerged as the newest bidder for GFT last week, prompting Mexican entrepreneurs headed by Fabio Covarrubias to withdraw their offer for the designer manufacturer after several months of negotiations.
GFT is burdened by serious financial difficulties and has been in the hands of Milan merchant bank Mediobanca, which is masterminding the company’s financial rescue process. GFT is now on its third potential buyer, after Italian manufacturer Miroglio pulled out last spring.
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GFT manufactures and markets men’s and women’s designer apparel under such names as Giorgio Armani, Valentino, Calvin Klein, Montana, Ungaro and Joseph Abboud and has said it expects 1994 sales to be over $822 million (1.4 trillion lire).
Plaid, which has annual revenues of about $300 million, is one of the largest manufacturers of men’s clothing in the U.S., and is privately owned by Mideast and U.S. investors.