Dubai-based Istithmar is set to buy Jones Apparel Group Inc's Barneys New York for $942.3 million after Japanese casual-clothing retailer Fast Retailing Co Ltd on Thursday pulled out of the bidding war.

The move by Fast Retailing ended a month-long tug-of-war between the Dubai-owned private equity firm and the operator of the Uniqlo stores for ownership of the luxury department store chain.

Jones Apparel said on Wednesday it agreed to sell Barneys to Istithmar, but Fast Retailing had until 5 pm on Thursday, US East Coast time (2100 GMT), to make a new offer.

The selling price more than doubles the $400 million that Jones Apparel paid for the New York fashion retailer in 2004.

Ahead of the announcement, shares in Fast Retailing closed up 10.5 percent at 7,190 yen on expectations that its bid for Barneys would fall through.

Investors had worried that Barneys was overpriced and that it would be difficult to achieve operational synergies between Fast Retailing and the upscale fashion store. - Reuters