Nordstrom, Inc. has announced it has signed a definitive agreement to take the company private in a $6.25 billion transaction.
Under the agreement, Erik, Pete, Jamie Nordstrom and other members of the Nordstrom family and El Puerto de Liverpool, S.A.B. de C.V. will acquire all of the outstanding common shares of Nordstrom not already beneficially owned by the Nordstrom Family and Liverpool in an all-cash transaction valued at approximately $6.25 billion.
Following the close of the transaction, the Nordstrom family will have a majority ownership stake in the company, which was founded as Nordstrom in 1901 and went public in 1971.
Under the terms of the agreement, Nordstrom common shareholders will receive $24.25 in cash for each share of Nordstrom common stock. The merger consideration represents a premium of approximately 42% to the company’s unaffected closing common stock price on March 18, 2024, the last trading day prior to media speculation regarding a potential transaction.
The Nordstrom board also intends to authorize a special dividend of up to $0.25 per share immediately prior to and contingent on the close of the transaction.
Upon completion of the transaction, Nordstrom will become a private company once again.
The Nordstrom board of directors, with Erik and Pete Nordstrom recusing themselves, has unanimously approved the proposed transaction upon the unanimous recommendation of a special committee of independent and disinterested directors.
The special committee, composed of Kirsten Green, Amie Thuener O’Toole and Eric Sprunk, was formed in February 2024 in response to interest expressed by Erik and Pete Nordstrom in exploring a possible transaction during the board’s most recent evaluation of possible avenues to enhance shareholder value.
“The special committee of the Nordstrom board of directors reviewed this proposal against the company’s standalone prospects for growth,” Mr. Sprunk said in a release. “Following a rigorous and independent evaluation and consultation with outside financial and legal advisors, the special committee unanimously concluded that this transaction offers greater value for all public shareholders at a significant premium to the unaffected share price.”
“The Nordstrom board regularly considers alternatives to enhance value, culminating in this most recent process,” added Nordstrom board chair Brad Tilden. “I want to thank the special committee for their diligent and thorough work evaluating and negotiating this transaction over the past several months.”
“For over a century, Nordstrom has operated with a foundational principle of helping customers feel good and look their best,” said Erik Nordstrom, CEO of Nordstrom. “Today marks an exciting new chapter for the business. On behalf of my family, we look forward to working with our teams to ensure Nordstrom thrives long into the future.”
“We’re grateful to the employees, customers and shareholders who have shaped Nordstrom into the company it is today,” said Nordstrom chief brand officer Pete Nordstrom. “Since our founding in 1901, we have been committed to providing our customers with the best possible service – and to improving it every day. We look forward to building on that commitment in this next phase of the company’s evolution.”
“Nordstrom is one of the worldwide leaders in department store retailing, and we’re thrilled to be investing in a company that has meaningfully shaped the industry for nearly 125 years,” said Graciano F. Guichard G., executive chairman of the Board of Directors of Liverpool. “We are honored to partner with the Nordstrom family and the company’s talented team as they continue to deliver outstanding service to customers.”
The transaction comes after El Puerto de Liverpool S.A.B.’s attempt in September 2022 to purchase 9.9% of Nordstrom’s stock.
In response, Nordstrom adopted a “poison pill” plan, designed to fend off potential hostile takeover bids by preventing investors from acquiring more than 10% of the company’s stock shares.
The “poison pill,” also known as a shareholder rights plan, is designed to make it more difficult for an outside firm to launch a takeover attempt.
The latest transaction is expected to close in the first half of 2025, subject to regulatory and other conditions. Upon completion of the transaction, Nordstrom’s common stock will no longer be listed on any public market.
Nordstrom operates a Nordstrom Direct warehouse in southwest Cedar Rapids.
