Nordstrom, Inc. has signed a definitive agreement under which Erik Nordstrom, Pete Nordstrom and Jamie Nordstrom, and other members of the Nordstrom Family and El Puerto de Liverpool, S.A.B. de C.V. (Liverpool) 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 on an enterprise basis.
Following the close of the transaction, the Nordstrom Family will have a majority ownership stake in the company, and Nordstrom will become a private company.
Under the terms of the agreement, Nordstrom common shareholders will receive $24.25 in cash for each share of Nordstrom common stock they hold. The merger consideration represents a premium of approximately 42 percent to the company’s unaffected closing common stock price on March 18, 2024, the last trading day before media speculation regarding a potential transaction. In addition, the Board intends to authorize a special dividend of up to $0.25 per share, based on Nordstrom’s cash on hand, immediately before and contingent on the close of the transaction.
The Nordstrom Board of Directors, with Erik Pete Nordstrom and Pete Nordstrom recusing themselves, has unanimously approved the proposed transaction upon the unanimous recommendation of a special committee of independent and disinterested directors that led the review and negotiation of this transaction. The special committee, composed of Kirsten Green, Amie Thuener O’Toole and former Nike, Inc. COO Eric Sprunk, was formed in February 2024 in response to interest expressed by Erik Nordstrom and Pete Nordstrom in exploring a possible transaction during the Board’s most recent evaluation of potential 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,” said Sprunk, chairman of the special committee. “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.”
Brad Tilden, chairman of the Nordstrom Board, said that the Nordstrom Board regularly considers alternatives to enhance value, culminating in this most recent process.
“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, Inc. “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.”
Pete Nordstrom, chief brand officer at Nordstrom, Inc., added, “We’re grateful to the employees, customers and shareholders who have shaped Nordstrom into the company it is today. 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, El Puerto de Liverpool, S.A.B. de C.V.. “We are honored to partner with the Nordstrom Family and the Company’s talented team as they continue to deliver outstanding service to customers.”
Transaction Details
The transaction is expected to close in the first half of 2025, subject to regulatory and other conditions, including approval of holders of two-thirds of the company’s common stock and the holders of a majority of the shares of the company not owned by the Nordstrom Family or Liverpool or their respective affiliates and the company’s directors and Section 16 officers.
The transaction will be financed through a combination of rollover equity by the Nordstrom Family and Liverpool, cash commitments by Liverpool, up to $450 million in borrowings under a new $1.2 billion ABL bank financing, and company cash on hand. The company’s $2.7 billion principal amount of existing senior notes and debentures are expected to remain outstanding following the transaction.
As part of the transaction, the company expects to take actions to secure the company’s existing senior notes and debentures with a second lien on the company’s current assets and related collateral and a first lien on the company’s other assets, excluding real estate, conditioned and effective upon the transaction closing.
Following the transaction’s closing, Nordstrom will be owned 50.1 percent by the Nordstrom Family and 49.9 percent by Liverpool.
In addition to the special dividend, if paid, Nordstrom expects to continue paying regular quarterly cash dividends of 19 cents per share through transaction close, including a pro-rated dividend for any partial quarter immediately prior to the close of the transaction.
Upon completion of the transaction, Nordstrom’s common stock will no longer be listed on any public market.
Morgan Stanley & Co. LLC and Centerview Partners LLC are acting as financial advisors to the special committee, and Sidley Austin LLP and Perkins Coie LLP are acting as legal counsel to the special committee.
Moelis & Company LLC is acting as financial advisor, and Wilmer Cutler Pickering Hale and Dorr LLP, Lane Powell PC, and Davis Wright Tremaine LLP are acting as legal counsel to the Nordstrom Family.
J.P. Morgan Securities LLC is acting as financial advisor, and Simpson Thacher & Bartlett LLP and Galicia Abogados, S.C. are acting as legal counsel for Liverpool.
Image courtesy Nordstrom, Inc.
