Giordano director Terry Ng Sze-yuen yesterday said Theme and its creditors failed to meet a deadline last Friday on whether it would accept its deal.

'We can't wait indefinitely,' Mr Ng said.

'We must do due diligence on whatever we're going to buy. Even if you buy a T-shirt you will check through [to see] if there are any flaws.' Giordano revised its offer, including a higher level of debt repayment, but received little support from Theme at board level.

The withdrawal left the door open to rival bidders, most notably clothing manufacturer High Fashion International.

Theme late last night issued a statement saying it - along with its 14 bank creditors - was now actively involved in negotiations with High Fashion. A third bid, from apparel retailer YGM Trading, has stalled.

High Fashion International director Raymond Wong Shing-loong said the company was finalising some details of its proposal with the bank creditors.

A source said the creditors had basically agreed to the proposal, except for technical issues which they hoped would be resolved in a meeting with Theme today.

Theme chairman Kenneth Lai Ngan-long has been lending his full support to High Fashion's proposal, largely because the company has said it will allow him to retain his chairmanship if it succeeds.

To beat Giordano, High Fashion was willing to skip due diligence and offered a much-needed cash injection of $45 million to keep Theme afloat.

Theme, which was slow to react to the financial downturn in 1997, is on the verge of collapse under the weight of $241 million in debts.

Mr Ng said Giordano would seek other investment opportunities, including acquisitions or setting up a new fashion line of its own using funds from a cash pile of almost $600 million.

Giordano had wanted to take over Theme because it would have given it instant exposure to a women's wear chain.

Theme is expected to clarify its position regarding the three proposals in the next couple of days.

TAKEOVERS