After searching for several months for a suitor, Tommy Hilfiger on 30th Dec embraced the same private equity firm that two years ago helped buy out fellow U.S. design icon Calvin Klein. Tommy Hilfiger Corp. said, it had accepted a US$ 1.6 billion cash takeover bid from Apax Partners. Apax in 2003 teamed up with clothing vendor Phillips-Van Heusen (PVH) Corp. to buy Calvin Klein, and PVH said it is in preliminary talks with Apax on how they could collaborate on a Tommy deal. Mr. John Megrue, Co-chief Executive Officer, Apax said, “This is an incredible brand, a great American iconic brand that we think we can continue to grow globally very significantly”. The deal values Tommy Hilfiger at about US$ 16.80 per share, a premium of 5 % based on Thursday's closing stock price. Tommy shares eased 8% to US$ 15.92 on the New York Stock Exchange, indicating investors were somewhat disappointed in the size of Apax's bid. Mr. John
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| Orrico, Fund Manager of the Arbitrage Fund, a mutual fund that specializes in merger targets, said that, in light of Tommy's 49 %share rise this year, the price seemed fair. “They're getting taken out in line with market expectations. If Tommy were worth more it would have been trading at more than US$ 16 on 22 Dec Mr. Orrico said.” Mr. Andrew Jassin Apparel Industry Consultant, Jassin-O'Rourke Group said, the price likely reflected Apax's realization that it will take additional investment to return the brand to growth after two years of consecutive sales declines. “This trouble is more perceptional than actual, adding that the brand might fare better as part of a larger organization, which is now a brand management organization,” Mr. Jassin said. Apax owns all of Philips-Van Heusen's Series B stock, which is convertible into 23 percent of the company's shares. Philips-Van Heusen has been exploring a Tommy Hilfiger licensing agreement with Apax, according to a source involved with the deal. 
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