US Markets
Wednesday, September 4th, 2024 2:11 pm EDT
Key Points
- Privatization Proposal: Nordstrom’s founding family, along with Mexican retailer El Puerto de Liverpool, has proposed taking the department store chain private at $23 per share, valuing the company at approximately $3.76 billion.
- Family and Liverpool Stakes: The Nordstrom family holds a 33.4% stake in the company, while Liverpool owns nearly 10%. The deal would be financed through rollover equity, cash from both parties, and $250 million in new bank financing.
- Improved Sales and Past Attempts: Nordstrom has recently outperformed some competitors like Macy’s and Kohl’s by focusing on trendier products. This bid follows a previous unsuccessful attempt by the family in 2018 to take the company private for $8.4 billion.
Nordstrom’s founding family, in collaboration with Mexico-based retailer El Puerto de Liverpool, has made a proposal to take the department store chain private at a price of $23 per share. This offer values the company at approximately $3.76 billion. The offer comes after a period of increased interest in the company’s stock, which has risen by 35% since March when initial reports surfaced about the family’s intentions. The Nordstrom family, which includes CEO Erik Nordstrom and President Peter Nordstrom, along with Liverpool, sent a non-binding letter indicating their desire to form a new entity to purchase the company.
The Nordstrom family currently owns about 54.6 million shares, or a 33.4% stake in the company, while Liverpool holds 15.8 million shares, representing nearly 10% of the total shares. The proposed deal would be financed through a combination of rollover equity and cash contributions from both the Nordstrom family and Liverpool, along with $250 million in new bank financing.
This latest bid follows a similar attempt by the Nordstrom family in 2018 to take the company private with an $8.4 billion offer, which was ultimately rejected by the company as being too low. The current bid reflects the family’s continued interest in regaining control of the company, which was founded in 1901 by John Nordstrom, the great-grandfather of the current CEO and president.
Nordstrom has managed to perform better than some of its competitors, such as Macy’s and Kohl’s, by focusing on stocking trendier products, which has helped bolster its sales. The company confirmed the family’s interest in pursuing a potential deal in April and formed a special committee of independent directors to evaluate the proposal. This development comes amid a backdrop of other interest in taking the company private, with Sycamore Partners also reportedly showing interest earlier this year. The proposed buyout marks the latest chapter in the Nordstrom family’s ongoing efforts to take the company private, reflecting their deep-rooted connection to the business and their strategic vision for its future.
For the original article on CNBC, please click here: https://www.cnbc.com/2024/09/04/nordstrom-founders-offer-23-per-share-to-take-the-department-store-private.html
