• Investing
  • Stock
  • Editor’s Pick
  • Economy
The Significant Deals
Stock

Nordstrom family will take retailer private in $4 billion deal

by December 23, 2024
written by December 23, 2024

By Savyata Mishra and Juveria Tabassum

(Reuters) -The Nordstrom (NYSE:JWN) family teamed up with Mexican retailer Liverpool to clinch a $4 billion deal to take iconic department store chain Nordstrom private, six years after a similar attempt fell short.

Nordstrom and rivals such as Macy’s (NYSE:M) have become enticing takeover targets in recent years as sales have slowed and shares have slumped. The Nordstrom family has wanted to take the company private in part because it believes it is undervalued in the public markets after a 70% tumble since 2015, according to sources familiar with the matter.

Before Monday’s trading, the company had a forward price-to-earnings ratio of 12.20, far below the industry median of 20.5, according to data compiled by LSEG. Its operating margins over the past three years have averaged 3.7%, less than the peer median.

The deal, announced Monday at a value of $24.25 a share, will give the Nordstrom family majority ownership and a chance to strengthen the company’s fortunes without having to report financials to public shareholders. Nordstrom had rebuffed an offer from the family back in 2018 worth $8.4 billion, far more than the latest bid.

Talk of a deal re-emerged in March, when Reuters exclusively reported the family was making another attempt at taking the company private.

Nordstrom’s shares were down 1.6% on Monday.

Department stores have struggled to increase sales in the past few years as shoppers cut spending due to higher inflation, and as they shifted to off-price chains such as TJX (NYSE:TJX). E-commerce giants such as Amazon.com (NASDAQ:AMZN) have also steadily grown market share, adding to the competition.

Higher input costs and supply-chain snags following the COVID-19 pandemic have also pressured the company.

In September, the family and El Puerto de Liverpool offered $23 a share for the 56% of Nordstrom they did not already own. A team-up with the Mexican retailer should reassure shareholders about the decisions the company makes going forward, emarketer analyst Suzy Davidkhanian said.

The acquisition, which was cleared by a special committee, gives majority ownership to the family, led by current CEO Erik Nordstrom and President Pete Nordstrom, the great-grandchildren of John Nordstrom, who founded the company in 1901.

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.

It is expected to close in the first half of 2025, the company said.

“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.

Morgan Stanley & Co (NYSE:MS) and Centerview Partners are acting as financial advisers to the special committee, and Moelis (NYSE:MC) & Company is acting as financial adviser to the Nordstrom family.

The sector has been a locus of deal activity in 2024. The parent company of Saks Fifth Avenue agreed to buy rival Neiman Marcus in July, the same month Macy’s scrapped talks with an investor group looking to buy the chain for nearly $7 billion.

This post appeared first on investing.com
0 comment
0
FacebookTwitterPinterestEmail

previous post
US accuses Rocket Homes of ‘illegal kickbacks’ in mortgage scheme
next post
TPG’s climate arm in talks to buy Altus Power, Reuters reports

You may also like

BASF results down on impairments, restructuring

January 27, 2025

European chipmakers slump as traders gauge DeepSeek AI...

January 27, 2025

Nasdaq futures tumble as China’s AI push rattles...

January 27, 2025

China Vanke’s CEO, chairman resign amid growing liquidity...

January 27, 2025

Fuji Media, rocked by sexual misconduct allegations, says...

January 27, 2025

Italy’s MPS shares fall ahead of Mediobanca board...

January 27, 2025

British Land stock drops following stake sale

January 27, 2025

UMG shares rally after new multi-year pact with...

January 27, 2025

BASF shares indicated 3% lower as impairments drag...

January 27, 2025

Lawyer group urges overhaul of US bank charter...

January 27, 2025
Fill Out & Get More Relevant News








    Stay ahead of the market and unlock exclusive trading insights & timely news. We value your privacy - your information is secure, and you can unsubscribe anytime. Gain an edge with hand-picked trading opportunities, stay informed with market-moving updates, and learn from expert tips & strategies.

    Recent Posts

    • Divided Fed proposes rule to ease capital requirements for big Wall Street banks

      June 26, 2025
    • Women’s Tennis Association extends media rights deal with Tennis Channel through 2032

      June 26, 2025
    • Bumble shares jump 26% as dating company plans to axe 30% of workforce

      June 26, 2025
    • Small-business AI use is lagging, but one firm is channeling Sherlock Holmes and knocking out ‘grunt work’

      June 25, 2025

    Categories

    • Economy (245)
    • Editor's Pick (3,646)
    • Investing (534)
    • Stock (6,426)

    Latest News

    • Divided Fed proposes rule to ease capital requirements for big Wall Street banks
    • Women’s Tennis Association extends media rights deal with Tennis Channel through 2032

    Popular News

    • Uber to launch AI assistant powered by OpenAI’s GPT-4o to help drivers go electric
    • Stargate initiative ‘directional win-win’ for Oracle and Microsoft – TD Cowen

    About The Significant deals

    • Privacy Policy
    • Terms & Conditions

    Copyright © 2025 thesignificantdeals.com | All Rights Reserved

    The Significant Deals
    • Investing
    • Stock
    • Editor’s Pick
    • Economy