Nordstrom’s founding family, in collaboration with Mexican retail group El Puerto de Liverpool, has submitted a proposal to take the department store chain private. This bid comes six years after a previous attempt was unsuccessful. According to a filing with the Securities and Exchange Commission (SEC) on September 4, the Nordstrom family and Liverpool are offering $23 per share for the stock owned by investors, representing a 0.8 percent premium to the previous day’s closing price.
Currently, the Nordstrom family already owns approximately 33.4 percent of the company’s outstanding shares, while Liverpool holds 9.6 percent. With about 163.65 million shares outstanding, the buyout bid values Nordstrom at $3.76 billion. This move follows the expressed interest of Erik Nordstrom, the company’s CEO, and Pete Nordstrom, its president, who formed a special committee to explore the possibility of going private.
The bid would be financed through a combination of rollover equity and cash commitments by the Nordstrom family and Liverpool, as well as $250 million in new bank financing. Nordstrom’s shares rose nearly 3 percent to $23.50 following the announcement.
It is worth noting that the Nordstrom founding family has faced challenges in their previous attempts to take the company private. In 2018, they teamed up with private equity firm Leonard Green to propose a buyout offer of $50 per share, which was rejected by the department store operator as too low. Despite their efforts to secure additional financing, the family was unable to increase their offer to a more favorable amount.
Nordstrom, a Seattle-based retailer chain, has a rich history tracing back to a shoe store opened by Swedish immigrant John Nordstrom and his partner. Currently led by Erik and Peter Nordstrom, the company is in its fourth generation of family leadership. The late Bruce Nordstrom, former company chairman and part of the third generation, played a crucial role in the company’s expansion across the West Coast, including the launch of Nordstrom Rack stores. Bruce Nordstrom was an advocate for making the company private again and passed away in May at the age of 90.
The proposal to take Nordstrom private reflects the Nordstrom family’s desire to regain control over the company and steer its future direction independently. The special committee, along with independent financial and legal advisors, will carefully review the bid to determine the best course of action for Nordstrom and its shareholders. The outcome of this proposal could significantly impact the future of the century-old department store chain.
