Nordstrom starts new era with private takeover

A significant change is on the horizon in the luxury segment of U.S. department stores: Nordstrom, the renowned department store chain, plans to withdraw from public markets through an impressive private purchase amounting to approximately $6.25 billion. Led by family members and the Mexican retail giant El Puerto de Liverpool, the acquisition is taking place in a pure cash transaction. Nordstrom shareholders are to receive $24.25 for each of their shares. This offer represents a remarkable premium of about 42 percent on the stock price as of March 18, 2024. Additionally, there is to be a special dividend that could amount to up to $0.25 per share – but only if the transaction is successfully completed. An independent special committee, appointed in February 2024 to review the Nordstrom family's offer, unanimously supported the acquisition. The board of directors also unanimously approved, with Erik and Pete Nordstrom abstaining from the vote. The goal is to achieve completion of the acquisition in the first half of 2025, provided that the necessary regulatory approvals and the consent of two-thirds of common shareholders are obtained – excluding the Nordstrom family, Liverpool, their partners, and company insiders. The financing of this deal is supported by a mix of equity from the Nordstrom family and Liverpool, cash reserves, potential new bank loans of $450 million, and company reserves. Nordstrom’s outstanding debt of $2.7 billion is to remain unchanged. Upon completion of the transaction, the Nordstrom family will hold a 50.1 percent stake, while Liverpool will acquire the remaining 49.9 percent. As a result, Nordstrom shares will be removed from public markets. Nordstrom CEO Erik Nordstrom expressed confidence: "For over a century, it has been our principle to help our customers feel good and look good. Today marks the beginning of an exciting new chapter." Recently, Nordstrom announced plans to expand its off-price division Nordstrom Rack, including a new store in Lakeland, Florida.