Nordstrom Going Private

Confirming reports from last week, Nordstrom Inc. (Seattle) announced its founding family and Mexico’s El Puerto de Liverpool will acquire all the outstanding common shares in the company not already owned by those two parties for $6.25 billion. Following the close of the all-cash deal, the Nordstrom family will have a majority ownership stake in the company and it will be privately held. (Specifically, the ownership split will be: 50.1 percent by the Nordstrom family and 49.9 percent by Liverpool.)

Under the terms of the agreement, Nordstrom common shareholders will receive $24.25 in cash for each share of Nordstrom common stock they hold. That represents a premium of approximately 42 percent to the company’s unaffected closing common stock price on March 18, 2024, the last trading day prior to media speculation regarding a potential transaction.

“The special committee of the Nordstrom board of directors reviewed this proposal against the company’s standalone prospects for growth,” said Eric Sprunk, chairman of the special committee. “Following a rigorous and independent evaluation and consultation with outside financial and legal advisors, the special committee unanimously concluded that this transaction offers greater value for all public shareholders at a significant premium to the unaffected share price.”

Said CEO said Erik Nordstrom: “For over a century, Nordstrom has operated with a foundational principle of helping customers feel good and look their best. Today marks an exciting new chapter for the business.”

“Nordstrom is one of the worldwide leaders in department store retailing, and we’re thrilled to be investing in a company that has meaningfully shaped the industry for nearly 125 years,” said Graciano F. Guichard G., Executive Chairman of Liverpool’s board.

The transaction is expected to close in the first half of 2025, subject to regulatory and other conditions, including approval of holders of two-thirds of the company’s common stock and the holders of a majority of the shares of the Company not owned by the Nordstrom family or Liverpool or their respective affiliates and the company’s directors and Section 16 officers.

The deal will be financed through a combination of rollover equity by the Nordstrom Family and Liverpool, cash commitments by Liverpool, up to $450 million in borrowings under a new $1.2 billion ABL bank financing, and company cash on hand.

Starting as a shoe store in 1901, the company has evolved since into 350 Nordstrom, Nordstrom Local and Nordstrom Rack locations. The latter brand, with about 280 units, has been the retailer’s main growth engine in recent years.