In a market that keeps jerking up and down, I think the bidding war Jones Apparel (NYSE:JNY) has going for its Barneys New York business is making Jones more and more interesting.

So far, the battle between Japan's Fast Retailing (OTC BB: FRCOF.PK) and Dubai investment fund Istithmar is up to $950 million (Fast Retailing's latest bid). I've already mentioned that I'm not a fan of Fast Retailing's brand expansion strategy, but with a market cap of $2.2 billion, Jones Apparel seems interesting once you back out the sale proceeds. That makes what's left of Jones look cheap.

But it's not a slam dunk, largely because Jones Apparel has been in a state of perpetual restructuring since 2003 and hasn't shown much in the way of success in its nonluxury brands. The company would still have interesting properties in Nine West, Anne Klein, and l.e.i., but would also retain a consolidated customer base in department stores like Macy's (NYSE:M) and Dillard's (NYSE:DDS) -- and that could squeeze the company on pricing.

The other question is what will Jones Apparel do with the funds it receives from selling Barneys? Ideally, I would like to see the company return some or most of it to shareholders, but the reality is that the company is very leveraged and will likely pay down debt. A combination of the two wouldn't be a bad idea. My worst fear would be that those funds would be reinvested into the current business, which shows no signs of deserving the money. The company hasn't given clear guidance here, which only makes the situation more difficult.

I don't have a strong opinion on Jones yet. But I do find the overall situation interesting and worth digging into. There might just be some value lurking underneath this mess. 

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Nathan Parmelee does not own shares in any of the companies mentioned. The Motley Fool has an ironclad disclosure policy.