By Savyata Mishra and Juveria Tabassum
(Reuters) -Nordstrom will be acquired by its founding family and Mexican retailer Liverpool for nearly $4 billion in an all-cash deal, leaving public markets after 54 years as the business attempts to tackle slowing demand.
The $24.25-per-share deal is 42% higher than the stock’s close on March 18, a day before Reuters exclusively reported that the founding family was seeking to take Nordstrom private six years after a similar attempt proved unsuccessful.
In September, the family and El Puerto de Liverpool offered $23 a share for the 56% of Nordstrom they did not already own.
Nordstrom shares have fallen nearly 70% from their all-time peak in 2015 as the rise of e-commerce giants such as Amazon led to a change in consumer shopping habits. Higher input costs and supply-chain snags following the COVID-19 pandemic have pressured the company too.
Department store chains such as Nordstrom and Macy’s have also struggled to grow their sales over the past couple of years because of shoppers turning thrifty as essentials got pricier, and due to rising competition from off-price chains including TJX Cos.
Nordstrom teaming up with the Mexican retailer for the deal is likely to reassure shareholders that the decisions the company is going to make going forward will be the right ones for the organization, emarketer analyst Suzy Davidkhanian said.
The acquisition, which was cleared by a special committee, gives majority ownership to the family consisting of current CEO Erik Nordstrom and President Pete Nordstrom, the great-grandchildren of John Nordstrom, who founded the company in 1901.
“Given the board’s approval and lack of any (apparent) opposition, I believe that the deal will go through at the proposed price,” said Morningstar analyst David Swartz.
Nordstrom’s shares were down more than 1% on Monday.
The deal has an enterprise value of $6.25 billion, including debt, and will be partly funded through $450 million in borrowings under a new $1.2 billion asset-based bank financing.
The transaction is expected to close in the first half of 2025, the company said.
Morgan Stanley & Co and Centerview Partners are acting as financial advisers to the special committee, and Moelis & Company is acting as financial adviser to the Nordstrom family.
Among other deals in the sector, the parent of Saks Fifth Avenue agreed to buy rival Neiman Marcus in July, a move expected to give the struggling luxury retailers more power to negotiate with vendors.
That same month, Macy’s scrapped talks with an investor group comprising Arkhouse Management and Brigade Capital that had offered to acquire the department store chain for $6.9 billion.
(Reporting by Savyata Mishra and Juveria Tabassum in Bengaluru; Editing by Sriraj Kalluvila and Devika Syamnath)
