Nordstrom Family Finalizing Offer to Take Chain Private

The family founding group of Nordstrom Inc. is finalizing its plans of submitting an offer to take the department store chain private, said people familiar with the U.S. based chain on Friday.

Nordstrom should be receiving the offer while it prepares to report earnings for the fourth quarter March 1 and give its investors an update on its performance during the all-important holiday shopping season. Stock at Nordstrom has increased nearly 30% since Thanksgiving of last year, on expectations by investors of solid profits.

The group held meetings with investment banks during last week and hopes to submit its offer by as soon as March once the banks receive approval from credit committees to provide financing, said sources. Details of this offer were not known.

Nordstrom has not commented about the chain possibly being taken private, while a representative for the family declined to comment.

Nordstrom shares were up by 7% on this news Friday, giving the business a $9 billion market capitalization.

The family group, which partnered with Leonard Green & Partners, which is a buyout company, had suspended an attempt to take it private last October due to difficulties getting debt financing for the bid ahead of the key shopping season of November and December.

At that time investment banks balked at approving debt financing that was required for the bid of $7 billion to $8 billion on terms the family group was looking for.

Nordstrom made an announcement last June that the group, which is the owner of 31.2% of the retailer, was considering going private with the company. Sources at the time said that the family thought it could manage the operational restructuring of the company better and transition it to e-commerce away from public markets.

Nordstrom formed a committee of board members to consider whatever offer it received from the founding family group.

The retailer announced in January that its comparable sales had increased by 1.2% during the nine weeks that ended December 30, in comparison with the same period one year ago. Those sales were helped by the growth in its off-price chain known as Nordstrom Rack and its online businesses.

The chain raised its full year forecast for earnings just slightly at that time to between $2.90 and $2.95 per share as compared to between $2.85 and $2.85.

One Response

  1. Alex Lutor says:

    Retail will be reinvented with AI. It’s my prediction for 2018. Hope Nordstrom going private will help to become more innovative.

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