Nordstrom has reached an agreement to transition into private ownership, led by members of the founding Nordstrom family alongside the prominent Mexican retailer, El Puerto de Liverpool. This ambitious deal is valued at an impressive $6.25 billion. The cash consideration of $24.25 per share offers a remarkable premium of approximately 42% compared to Nordstrom's last closing price on March 18, the trading day prior to the disclosure of the potential transaction.
This latest offer was an enhancement from an earlier proposal by the group, which had set the share price at $23 as of September. Despite this significant proposition, shares of Nordstrom experienced a slight dip of 1.5% in trading on Monday. Key figures in this pivotal movement include Chief Executive Erik Nordstrom, President Pete Nordstrom, Jamie Nordstrom, plus additional members of the Nordstrom lineage, in collaboration with El Puerto de Liverpool.
Together, they will acquire all outstanding shares of Nordstrom's department store chain that are not already in their possession. Upon the closure of this deal, the Nordstrom family is projected to hold a 50.1% ownership stake in the company, whereas El Puerto de Liverpool would maintain a 49.9% stake.
Anticipated to finalize in the first half of 2025, the completion of the deal is subject to regulatory approvals, after which Nordstrom's stock will no longer be available on public markets. A special committee constituted by the Nordstrom board in February conducted a thorough analysis of the proposal, weighing it against the company’s standalone potential for growth.
Eric Sprunk, chairman of the special committee, stated, "The special committee unanimously concluded that this transaction offers greater value for all public shareholders at a significant premium to the unaffected share price." Furthermore, the board has also agreed to distribute a special cash dividend of up to $0.25 per share, contingent upon the deal's closure.
This will complement the company's existing quarterly cash dividend of $0.19 until the deal’s completion. In a recent financial update, Nordstrom reported third-quarter fiscal revenue of $3.46 billion, demonstrating growth from last year's $3.32 billion. Adjusted earnings per share also showed progress, climbing to $0.33 for the three-month period ended November 2, compared to $0.25 in Q3 of 2023. In a related note, earlier this month, shareholders from Macy's expressed their concerns, prompting Barington Capital and Thor Equities to pressure the Nordstrom competitor to reduce capital expenditures and explore strategic alternatives regarding its Bloomingdale's and Bluemercury chains. Price: 24.22, Change: -0.32, Percent Change: -1.28.