Nordstrom family members including CEO Erik Nordstrom and his brother Pete, who is president of the company, have teamed up with Mexican retail company El Puerto de Liverpool to buy the department store for $23 per share or $3.8 billion in cash.
The deal would be financed “through a combination of rollover equity and cash commitments by members of the Nordstrom family and Liverpool and $250 million in new bank financing.” Existing debt would remain outstanding, per a company press release.
A special committee of the board, established earlier this year when the Nordstroms indicated their interest in potentially making an offer, is reviewing the proposal and had no further comment.
The scope of the offer is somewhat unusual given that it tracks with Nordstrom’s current stock price, which theoretically wouldn’t entice shareholders much, but the influence of the Nordstrom family alters those dynamics, according to emailed comments from GlobalData Retail Managing Director Neil Saunders. Moreover, El Puerto de Liverpool’s involvement could mean that the price could ultimately go higher, he also said.
Nordstrom had been struggling in recent years, but in Q2 both its full-line and off-price Rack businesses notched sales gains. Ongoing volatility may mean that this deal is about what shareholders can expect.
"The offer comes at a time when Nordstrom is getting back on track after a long period of poor performance,” Saunders said. “However, the business remains one of two halves. The department store division has various structural challenges, while the off-price Rack division is starting to produce some good growth. This mixed outlook will limit the amount any party is willing to pay.”
