The Nordstrom family offered $3.8 billion to take the company private — far less than the bid it made six years ago, as department stores are under increasing pressure due to declining footfall at malls.
Brothers Erik and Pete Nordstrom — chief executive and chairman, respectively — are teaming up with Mexican department store chain El Puerto de Liverpool to buy all of the company's outstanding shares for a cash offer of $23 a share.
The latest takeout bid, disclosed in a securities filing Wednesday, values the retailer at less than half the family's previous offer of $8.4 billion in 2018 — a $50 per share bid that valued it at more than $100 billion. Rejected by the company's board It was very little at that time.
In a letter to the board of directors, Eric said Nordstrom family members own approximately 33.4% of the company's outstanding common stock. The Seattle-based company operates about 350 stores, including its off-price chain Nordstrom Rack.
The Nordstrom family, which lost its patriarch Bruce in May at age 90, will retain 50.1% of the company under the terms of the deal. In 2019, Blake Nordstromwho led the company with his brothers, died suddenly from lymphoma at the age of 58.
The family declared their goal The 123-year-old company will be taken private in March And the retailer's board formed a special committee at the time to evaluate the plan.
“The special committee and other independent directors will carefully review the proposal, in consultation with independent financial and legal advisors, to determine a course of action that is in the best interests of Nordstrom and all shareholders,” Nordstrom said in a statement Wednesday.
Nordstrom did not immediately respond to a request for additional comment.
Department store sales have fallen sharply over the past decade, pushing for consolidation in the sector. This summer, Saks Fifth Avenue parent H.B.C. announced a deal to acquire luxury rival Neiman Marcus for $2.65 billion, including a minority investment from Amazon. The deal is pending regulatory approval.
Meanwhile, Messi recently has faced pressure from activist investors Amid declining sales, the company has decided to sell itself or become a private company.
Nordstrom, which began as a shoe store in Seattle in 1901, has been seeing its financial performance improve recently. The company said its revenue rose 3.4% to $3.9 billion in the second quarter and comparable sales rose 1.9% from a year earlier.
“It's no surprise that the Nordstrom family has made an offer to buy the department store chain. Interestingly, the price is $23 per share, which is about the same as the stock's current price,” said Neil Saunders, managing director at GlobalData.
“Under normal circumstances the lack of any real premium would make this offer unattractive. 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.”
“Liverpool's involvement in the deal could mean there is the potential for the price to be increased further – which the committee could consider,” Saunders said.
The company's shares were down less than 1% in morning trade.
