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To: Johnny Canuck who wrote (39853)	7/7/2003 12:35:50 PM
From: Johnny Canuck	Read Replies (1) \| Respond to of 71765

Jeans Maker VF Corp to Acquire Nautica Monday July 7, 10:44 am ET By Jean Scheidnes NEW YORK (Reuters) - VF Corp. (NYSE:VFC - News), the maker of Lee and Wrangler jeans, said on Monday it agreed to buy designer Nautica Enterprises Inc. (NasdaqNM:NAUT - News) for about $586 million, as it works to expand its apparel brands. ADVERTISEMENT VF Corp., which also makes Vanity Fair lingerie and North Face outerwear, said it would pay $17 per share in cash for Nautica, plus another $14.6 million to cash out its workers' stock options. The $17 a share offer represents a 29 percent premium to Nautica's July 3 closing share price of $13.19. Nautica shares surged $3.55, or 27 percent, to $16.75 in Nasdaq trading on Monday. VF shares climbed $1.22, or 3.6 percent, to $35.26 on the New York Stock Exchange (News - Websites). Nautica, known for its preppy, All-American styles that compete with Tommy Hilfiger Corp. (NYSE:TOM - News) and Polo Ralph Lauren Corp. (NYSE:RL - News), also owns the pricey Earl Jeans brand. VF had said previously it was looking to acquire a brand of sportswear and a jeans brand sold in the high-end and specialty store channels. VF's chief executive officer, Mackey McDonald, told analysts on a conference call that the company would focus initially on the menswear and women's jeans businesses. Nautica, along with Tommy Hilfiger, has been losing market share in department stores, which are making room for new brands in an attempt to compete with discounters. The men's sportswear market has become particularly crowded. VF said it had yet to determine the best course of action with respect to Nautica's John Varvatos division, which produces a high-end menswear collection by the designer, who is a Nautica director. Nautica announced last month that it was in merger talks, as it contended with a dissident investor group trying to unseat two of the company's directors. Under the agreement, VF said it would also pay Nautica's vice chairman, David Chu, for his rights to 50 percent of the royalties that come from licensing Nautica's trademark. Chu, who would oversee global design, product development and marketing for the Nautica brand following the acquisition, would receive $38 million when the deal closed, plus another $33 million on both the third and fourth anniversaries of that date, VF said in a written statement. The boards of both companies have approved the deal. VF expects the transaction to close early in the fourth quarter of this year. It said the acquisition could add about 10 cents to earnings per share in 2004. VF said it had commitments from Chu and Nautica Chairman and CEO Harvey Sanders to vote all their shares in favor of the merger, representing about 10 percent of the current shares outstanding. Nautica is expected to maintain its headquarters in New York and its distribution center in Martinsville, Virginia. VF is based in Greensboro, North Carolina.