Nordstrom family in $3.76 billion bid to take chain private with Mexican retailer
Nordstrom family members have teamed up with Mexican retail group El Puerto de Liverpool to acquire the century-old department store company.
Several months after Nordstrom said it formed a special committee to explore a sale, Nordstrom family members — including CEO Erik Nordstrom and his brother Pete, who serves as president — and the Mexican retail giant have offered to buy the department store company and take it private for $23 per share. The bid values the company at approximately $3.76 billion.
El Puerto de Liverpool, which operates more than 300 stores across Mexico, owns a nearly 10% stake in Nordstrom. The Nordstrom family owns a 33.4% stake.
The proposal states that the deal would be financed through a combination of rollover equity and cash commitments by members of the Nordstrom family and Liverpool and $250 million in new bank financing. The existing indebtedness would remain outstanding.
“The special committee and the other independent directors will carefully review the proposal in consultation with independent financial and legal advisors to determine the course of action that is in the best interests of Nordstrom and all shareholders,” the company said in a statement.
In an AP report, Neil Saunders, managing director of GlobalData, noted that what makes the proposed deal interesting is that the $23 per share price is “pretty much” the current price of Nordstrom stock.
“The lack of any real premium would, under normal circumstances, make the offer unattractive,” Saunders said in the report. "However, as a family-run firm the dynamics are slightly different, and it will be up to an independent committee to determine whether this is in the best interests of the company and its investors.”
Similar to other department store retailers, Nordstrom has struggled with sluggish sales in recent years. Sales in its most recent quarter, however, rose 3.4% to $3.89 billion and comparable sales rose 1.9%.
Nordstrom was founded in 1901 by John Nordstrom, the great-grandfather of Erik and Peter Nordstrom.
Morgan Stanley & Co. LLC and Centerview Partners LLC are acting as financial advisors to the special committee, and Sidley Austin LLP and Perkins Coie LLP are acting as legal counsel.
