The Nordstrom family, in collaboration with Mexican retail giant El Puerto de Liverpool, has put forward a $3.76 billion offer to take the iconic department store chain private, marking a significant move in the retail landscape. The bid, priced at $23 per share, reflects a valuation that aligns closely with Nordstrom's current market price, underscoring the family's strategic vision for the company as it navigates the challenges of a changing retail environment.
The offer, revealed in a regulatory filing on Wednesday, includes a non-binding proposal to acquire all outstanding shares of Nordstrom, which has seen its stock price rise by 35% since initial reports of the family's interest emerged in March. The bid is backed by a combination of equity from the Nordstrom family, cash from Liverpool, and $250 million in new bank financing.
Nordstrom, a storied retailer founded in 1901 by John Nordstrom, has faced its share of ups and downs over the years. However, recent sales figures suggest a company on the rebound. The retailer reported a 3.4% sales increase in the second quarter of this year, driven by a strong performance from its discount division, Nordstrom Rack, where sales jumped 8.8%. Despite these gains, the company's net income fell by nearly 11% to $122 million, reflecting ongoing challenges in the department store sector.
The Nordstrom family, which owns approximately 33.4% of the company's stock, has teamed up with El Puerto de Liverpool, which already holds a 9.6% stake in the company. Liverpool, a major player in the Mexican retail market with over 300 stores and a substantial credit card operation, is expected to play a key role in the proposed acquisition.
The move to take Nordstrom private comes after years of fluctuating performance and strategic shifts. In 2018, the Nordstrom family attempted a similar buyout but was rebuffed after offering $8.4 billion, a bid deemed too low by the company's board. This time, the family's offer is more conservative, aligning closely with the company's current trading price, a factor that could influence the board's decision.
Neil Saunders, managing director of GlobalData, noted that while the offer's lack of a significant premium might typically make it unattractive, the unique dynamics of a family-run business could sway the decision. "It will be up to an independent committee to determine whether this is in the best interests of the company and its investors," Saunders said.
Nordstrom's stock, which has climbed 27% this year, edged slightly higher to $23.16 following the announcement. The proposed buyout, if successful, would mark a significant shift for the 122-year-old retailer, positioning it to navigate the complexities of the modern retail market without the pressures of public ownership.
