Phillips-Van Heusen is in exclusive talks to buy Tommy Hilfiger in a deal that could shake up the global apparel business, The Post has learned.
New York-based PVH — whose $2.4 billion portfolio of clothing brands includes Izod and a global license for Calvin Klein — is negotiating to buy Hilfiger, now based in Europe, in a cash-and-stock deal that values the fashion house at roughly $4 billion including debt, sources said.
PVH could close the purchase “within a week or two,” according to a source close to the talks, and is lunging to buy Hilfiger partly to head off an initial public offering that was being planned for this year to fund a recapitalization of the company.
Hilfiger’s private-equity owner Apax Partners, which bought Hilfiger in 2005 for $1.6 billion, had been planning to list the company on Amsterdam’s Euronext stock exchange after shelving similar plans in early 2008, sources said.
But last month, Apax made a round of phone calls to a handful of potential buyers, telling each to make an offer or “forever hold your peace,” according to one source. Under terms currently being discussed with PVH, Apax will unload the majority of Hilfiger while retaining a stake of about 30 percent, sources said.
That’s partly because Hilfiger is a “big gulp to swallow” for PVH, in the words of one industry source. PVH, which currently has about $400 million in debt and more than $350 million in cash on its balance sheet, is looking to take on significant leverage to get the deal done, sources said.
Tommy Hilfiger and Apax declined to comment, while PVH didn’t respond to a request for comment.
While some investors may fret over the massive financing required for the deal, “bigger is better” for PVH, according to a source familiar with the company’s strategy. PVH has been looking for a way to grow globally, while Hilfiger has been successfully expanding in Europe, the source said.
The deal could threaten rivals like New York-based Warnaco, which owns some Calvin Klein licenses and has been aggressively expanding in Europe and Asia. Indeed, insiders have speculated for years that PVH and Warnaco would inevitably merge, given that the two companies are effectively splitting the Calvin Klein brand.
“The only thing that has kept [PVH and Warnaco] apart is the egos at the top,” according to one banking source.
A tie-up between PVH and Hilfiger could also be a defeat for VF Corp. — the well-regarded owner of brands like Nautica, Wrangler and John Varvatos — which has been prowling for acquisitions.
PVH has the insider’s track partly because of its historically close relationship with Apax, which in 2003 helped finance PVH’s purchase of Calvin Klein. Apax took a 23 percent stake in PVH as a result of the Calvin Klein deal before exiting it in 2006. josh.kosman@nypost.com