Nordstrom Inc. to Go Private, Board Approves Deal for Buyout
Nordstrom Inc. is going private.
As expected, the Seattle-based retailer said Monday that it signed a definitive agreement under which the Nordstrom family and Mexican retailer El Puerto de Liverpool will acquire all of the outstanding shares of Nordstrom not beneficially owned by the Nordstrom family and Liverpool. It’s an all-cash transaction with an enterprise value of about $6.25 billion.
The announcement confirms a Dec. 18 report in WWD that the deal was imminent.
Nordstrom common shareholders will receive $24.25 in cash for each share of common stock they hold. The deal represents a premium of about 42 percent to the company’s unaffected closing stock price on March 18, which was the last trading day prior to media speculation about the potential transaction.
Nordstrom’s board has approved the buyout. Nordstrom Inc. is led by brothers Erik and Pete, chief executive officer, and president and chief brand officer, respectively, as well as their cousin Jamie, who serves as chief merchandising officer.
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“For over a century, Nordstrom has operated with a foundational principle of helping customers feel good and look their best,” said Erik, in a statement. “Today marks an exciting new chapter for the business. On behalf of my family, we look forward to working with our teams to ensure Nordstrom thrives long into the future.”
“We’re grateful to the employees, customers and shareholders who have shaped Nordstrom into the company it is today,” Pete said in a statement. “Since our founding in 1901, we have been committed to providing our customers with the best possible service — and to improving it every day. We look forward to building on that commitment in this next phase of the company’s evolution.”
“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 the board of directors of Liverpool. “We are honored to partner with the Nordstrom family and the company’s talented team as they continue to deliver outstanding service to customers.”
The board approved the deal upon the recommendation of a special committee of independent directors that conducted a review of the transaction proposal submitted earlier this year. 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 company officers who are those required to disclose their beneficial ownership of the company’s equity.
The transaction 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 (asset-based lending) bank financing, and company cash on hand. The company’s $2.7 billion principal amount of existing senior notes and debentures are expected to remain outstanding following the transaction. Following the closing of the transaction, Nordstrom will be 50.1 percent owned by the Nordstrom family and 49.9 owned by Liverpool.
“The special committee of the Nordstrom board of directors reviewed this proposal against the company’s stand-alone prospects for growth,” said Eric Sprunk, chairman of the special committee, in a statement Monday. Sprunk said the deal offers “greater value for all public shareholders at a significant premium to the unaffected share price.”
Also, common shareholders will receive a special dividend of up to $0.25 per share based on cash on hand at the close of the transaction. Nordstrom stock closed Friday at $24.53.
