Nordstrom to go private in $6.25 billion deal with Nordstrom family and a Mexican retail group
Century-old department store Nordstrom has agreed to be acquired and taken private by members of the Nordstrom family and a Mexican retail group in a $6.25 billion deal, as the department store faces pressure from discount chains and other competition.
Nordstrom shareholders will receive $24.25 in cash for each share of Nordstrom common stock, for a total of approximately $4 billion, equivalent to a 42% premium on the company’s stock as of March 18, when media reports of the potential transaction were made. Nordstrom will also be saddled with more than $2 billion in debt.
As a privately held company, Nordstrom may have more leeway to revive the department store chain, which like other chains has sought to revive sluggish sales for years. Other publicly traded retailers, including Macy’s and Kohl’s, are facing pressure from major investors to provide bigger returns to investors while also trying to fend off competition from low-cost rivals such as Walmart and Amazon.
“While a change in ownership will not automatically solve all problems with department store operations, it will allow the family and its backers to take a long-term view of the business and make necessary investments and changes, free from short-term scrutiny.” Neil Saunders, analyst at GlobalData said in a research note on Monday.
He added: “The Nordstrom family has the talent and ability to implement change like the Port of Liverpool. They will probably run the business as a retailer rather than as some financial play, In our view, this is just a financial play and is a very positive thing for the long-term health of the brand. “
Nordstrom shares fell 36 cents, or 1.5%, to $24.17 in early trading.
Nordstrom Family, Port of Liverpool offer
The offer announced on Monday tops the list Previous bid of $23 per share Made in September by the Nordstrom family and Mexican retail group El Puerto de Liverpool.
The board also plans to authorize a special dividend of up to 25 cents per share based on Nordstrom’s cash on hand prior to closing and at closing.
The deal is expected to close in the first half of 2025, at which time the company’s shares will no longer be publicly traded.
Nordstrom’s board of directors unanimously approved the proposed deal, and Nordstrom family members Erik and Pete Nordstrom, who took over the company, recused themselves from the vote.
Once the deal closes, the Nordstrom family will own a majority stake in the company. Erik and Pete Nordstrom are the fourth generation to lead the Seattle-based retailer, which was founded in 1901 as a shoe store. Erik is the company’s CEO and Peter is its president.
With 23 new stores opening so far this year, the company now operates 381 Nordstrom and Nordstrom Rack stores in the U.S.
