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Another Deal Cooking: VF Corp. Said in Talks For Nautica Acquisition

VF Corp. could be the next company to land a big designer name, as sources say it is involved in intense negotiations to acquire Nautica Enterprises.

NEW YORK — Could VF Corp. be the next company to land a big designer catch?

According to sources, VF is involved in intense negotiations to acquire Nautica Enterprises, the $694 million diversified apparel company that’s had its ups and downs the past few years.

As reported, Nautica announced Friday it was talking to potential acquirers to enhance shareholder value. A spokesman for Nautica reiterated, “The company is not going to comment on speculation regarding the sale process.” He also noted that Harvey Sanders, chairman and chief executive officer of Nautica, was traveling this week and unavailable for comment.

A spokeswoman for VF told WWD, “We have a company policy where we don’t comment on market rumors or specific acquisition targets.”

One financial source estimated that a buyer would have to pay about $15 a share, or a total of about $500 million, for Nautica, about a 15 percent premium to the stock’s closing price on Monday. Nautica shares closed at $13, down 36 cents, or 2.7 percent, in Nasdaq trading as all major indices moved sharply lower.

VF has been eager to buy a major designer name for a while. The group, whose revenues in its last fiscal year were $5.7 billion, came close to buying Calvin Klein Inc. in December, but was outbid at the last minute by Phillips-Van Heusen. A Nautica deal would give VF a strong foothold in the men’s collections area of department stores with its men’s sportswear line and would give VF two well-recognized jeanswear brands for department store distribution — Nautica and Earl Jeans. Nautica also manufactures and markets the highly respected John Varvatos men’s wear collection, which will be shown in Milan Wednesday.

But Nautica has had particular difficulties in its core men’s sportswear division in the last few years, while its women’s jeanswear and Earl Jeans operations also were challenged in fiscal year 2003. Nautica’s men’s jeans, sleepwear and children’s wear performed well last year, however. Nautica had income of $20.7 million on sales of $693.7 million in fiscal 2003.

VF’s denim lineup includes Wrangler, Chic, Brittania and Gitano in the mass market and the Lee and Riders labels at national chains and department stores. VF’s other, nondenim brands include Vassarette, Jansport, The North Face and HealthTex.
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