Nordstrom, a well-established department store with over a century of history, has agreed to a significant $6.25 billion takeover by members of the Nordstrom family and a Mexican retail group, El Puerto de Liverpool. This move comes as the company faces increasing competition from discount retailers and online giants.
Under the terms of the deal, Nordstrom shareholders will receive $24.25 in cash per share, a total payout of around $4 billion, marking a 42% premium over the company’s stock price before the announcement. Additionally, the Nordstrom family will assume more than $2 billion in debt.
Going private may give the Nordstrom family and its partners greater flexibility to revamp the department store chain, which has struggled to boost sales in recent years. Analysts suggest that with less pressure from public investors seeking immediate returns, the family might be able to focus on long-term strategies that benefit the brand. Neil Saunders from GlobalData highlights the family’s potential to enact meaningful changes and prioritize retail operations over financial maneuvers.
Following the announcement, Nordstrom’s stock saw a slight decline of 1.5%, dropping to $24.17. The current offer surpasses a previous bid of $23 per share made in September. Nordstrom’s board has approved the transaction and is also contemplating a special dividend of up to 25 cents per share, contingent on the completion of the deal, which is expected to finalize in the first half of 2025. After this transition, the Nordstrom family will hold a majority stake in the company, continuing its legacy, as Erik and Pete Nordstrom represent the fourth generation to lead the Seattle-based retailer, originally established in 1901.
In a landscape where retail faces profound challenges, the Nordstrom family’s commitment to taking the company private could create an opportunity for revitalization. This transition may foster innovative approaches to enhance the brand’s competitiveness and consumer appeal, ultimately bringing fresh prospects for both the retail chain and its customers.