Why Nordstrom Is Going Private In $6.25 Billion Deal With Its Family And Mexican Retail Giant

Nordstrom, the hundred-year-old retailer, will be going private in a $6.25 billion deal between the Nordstrom family and the Mexican retail conglomerate El Puerto de Liverpool. This reflects how things have not been very smooth for the departmental stores with challenges such as the competition between discount stores and online websites like Amazon and Walmart.

Shareholders Will Get Cash Premium

The cash will be paid out to shareholders at $24.25 per share, summing up to a total payout of about $4 billion. This is 42% more than the March 18 stock price for the company before rumors started circulating about the acquisition. The Nordstrom family and their partners will take over over $2 billion in debt as part of the deal. Private ownership will give the company the flexibility in strategy.

As a private company, Nordstrom is likely to become more agile in the long-term strategy implementation as it will not be under pressure from the public market. Publicly traded competitors such as Macy’s and Kohl’s have had difficulties balancing investor expectations with the need to respond to low-cost retailers.

According to Neil Saunders, an analyst at GlobalData, this transition has the following advantages: “A change in ownership does not automatically solve all operational issues, but it allows the family and their backers to take a long-term view and make necessary investments without short-term market scrutiny.”

He further said, “The Nordstrom family and El Puerto de Liverpool have experience to manage the business better. It is a healthy step for the long term of the brand.”

Revise Offer And Special Dividend

The $24.25-a-share deal is superior to a earlier bid for $23-a-share put on the table by Nordstrom family, along with El Puerto de Liverpool in September. For the transaction, Nordstrom’s board also intends to approve up to a quarter of the per-share offering amount special dividend, should the acquisition go through.

At closing of the deal, which is expected to happen in the first half of 2025, Nordstrom will exit public trading with the Nordstrom family holding a majority ownership stake. Erik Nordstrom, who serves as the company’s CEO, and Pete Nordstrom, the president of the firm, will lead the fourth-generation family-owned business.

Founded in 1901 as a shoe store in Seattle, Nordstrom has evolved into a prominent name in retail, operating 381 Nordstrom and Nordstrom Rack stores across the U.S. The move to go private aligns with efforts to rejuvenate the brand amid declining department store sales.

Despite the announcement, Nordstrom’s shares dipped slightly, falling 1.5% to $24.17 in Monday’s trading.

This deal represents the increasing phenomenon of family-led buyouts that look to preserve heritage brands but also help them adapt to a rapidly shifting retail landscape.

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