Nordstrom has been taken private by its founding family, which an analyst said would allow the department store chain to have a long-term view and make necessary changes.
The company announced late last month that the Nordstrom family, including Erik, Pete, Jamie Nordstrom among others, and El Puerto de Liverpool would acquire all of the outstanding common shares for $6.25 billion.
The board, with Erik and Pete Nordstrom recusing themselves, unanimously approved the proposed transaction upon the unanimous recommendation of a special committee of independent and disinterested directors.
The transaction will be financed through rollover equity by the Nordstroms and Liverpool, cash commitments by Liverpool, up to $450 million in borrowings under a new $1.2 billion ABL bank financing, and cash on hand. It is expected to close in the first half of this year.
Upon completion of the transaction, Nordstrom’s common stock will no longer be listed on any public market.
GlobalData MD Neil Saunders said the deal marked the success of Nordstrom’s years-long efforts to go private.
“While a change in ownership does not automatically remedy all of the problems with the department store operation, it will allow the family and their backers to take a long-term view of the business and make necessary investments and changes away from the short-term scrutiny of public markets,” he stated.
Nordstrom has been one of the weakest performers in the department store space, Saunders continued, adding that many adjustments are needed to fix recent missteps with merchandising, operations and store standards.
The Nordstrom family and Liverpool will likely run the business as a retailer rather than as some kind of financial play, which is a very positive thing for the long-term health of the brand, the analyst said.