Seattle-based Nordstrom faces a potential shift in ownership as family members propose a $3.76 billion privatization deal.
The Nordstrom family, who currently own 33.4% of the company’s outstanding common stock, has offered to buy out shareholders at $23 per share. The proposal represents a premium of nearly 35% over the stock price since rumours of the transaction first emerged in March.
Backing the Nordstrom family in the venture is El Puerto de Liverpool, a prominent Mexican retail group. With over 300 stores in Mexico and a robust credit card business boasting 7.2 million active accounts, Liverpool already holds a 9.6% stake in Nordstrom stock.
Founded in 1901 as a shoe store, Nordstrom has evolved into a major player in the upscale retail sector in the US. Fourth-generation family members Erik and Peter Nordstrom currently lead the company as CEO and president, respectively.
In their letter to the board of directors, the family cited the passing of their father, Bruce Nordstrom, as one of the driving forces behind this move. Bruce Nordstrom, who served as chairman, died in May at the age of 90.
The proposed deal includes commitments for $250 million in new bank financing, demonstrating the group’s confidence in Nordstrom’s future prospects.
The move follows financial struggles that led to Nordstorm exiting its Canadian operations last year. That included an online business as well as six full-priced stores and seven Nordstrom Rack locations. Spaces are now being back-filled, including announcements that La Maison Simons would occupy parts of the CF Toronto Eaton Centre and Yorkdale Nordstrom boxes in Toronto.
