The Nordstrom family is set to take the Seattle-based department store chain private in a deal valued at $6.3 billion, the retailer said Monday.
The deal, which the Nordstroms are doing with El Puerto de Liverpool, equates to $24.25 per share. That’s a 42 percent markup from where Nordstrom stock was trading on March 18, when reports surfaced on the go-private transaction.
The deal for the over 350-store company requires two-thirds shareholder approval. The first half of 2025 is when the deal is estimated to close. If that happens, Nordstrom stock would cease trading on the New York Stock Exchange.
To get the deal done, the Nordstrom family will roll over equity in lieu of liquidity post-closing, while Liverpool is committing cash. Another $1.2 billion in an asset-backed loan was also arranged.
The Nordstroms would hold a 50.1 percent stake in the business post-closing. Meanwhile, El Puerto de Liverpool, owner of the Liverpool and Suburbia chains in Mexico and nearly 30 malls, would hold 49.9 percent.
“Today marks an exciting new chapter for the business,” Nordstrom CEO Erik Nordstrom said in a statement.
Going Private
Nordstrom, along with President Pete Nordstrom, first made moves on the go-private plan earlier this year. The retailer, in response, formed a special committee to evaluate its options. In September, the company disclosed the Nordstrom family and Liverpool offered $23 per share.
Investors didn’t appear excited by Monday’s announcement. Shares of Nordstrom were trading down 1.2 percent to $24.24 in morning trading. The department store retailer had a recent market cap of $4 billion.
The deal, if approved, would allow the Nordstroms to right-size their department store chain away from Wall Street scrutiny.
Its luxury business has struggled to shake off the effects of the pandemic. A mismatch in buying and inventory on hand during that same time didn’t help. Meanwhile, discount chain Nordstrom Rack has benefited from off-price’s surge.
In the company’s fiscal third-quarter ended Nov. 2, its namesake’s net sales rose 1.3 percent. Meanwhile, Nordstrom Rack and digital sales increased 10.6 percent and 6.4 percent, respectively.
As of the end of the November quarter, Nordstrom opened 23 Rack stores with 16 more in the pipeline.
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