Jones Lang LaSalle


Warnaco shares up on takeover speculation
by David Jones

Shares of Warnaco Group Inc. rose sharply on Wednesday following a news report saying the intimate-apparel and swimwear maker could be an acquisition target of retailer Phillips-Van Heusen Corp.

Women's Wear Daily, citing unnamed sources, said there have been talks about combining Warnaco, which owns the Calvin Klein business and the license for Calvin Klein jeans with Phillips-Van Heusen, which owns the rest of the Calvin Klein business.

Phillips-Van Heusen Chief Executive Emanuel Chirico reportedly said that there were two criteria for an acquisition: a very strong brand that has great consumer recognition or an extension of an existing product category such as a complimentary retail operation or additional licensing venues.

Shares of Warnaco rose as much as 10.3% to $19.29 and were up 6.4% in the afternoon, while Phillips shares were gained as much as 5.6% at $36.28.

Phillips-Van Heusen and Warnaco, officials each said they do not "comment on rumor and speculation."

Warnaco, the maker of Speedo, Nautica and other lines, acquired long-term Calvin Klein licenses in Europe and Asia for $284 million in cash in December to help boost its profits, which have declined more than 40% in the last two consecutive quarters.

©2006 Crain Communications Inc.