Department store chain Nordstrom will be acquired by its founding family and Mexican retailer Liverpool for nearly $4 billion in an all-cash deal, going private at a time when high-end retailers are grappling with slow demand.
The company’s shareholders will get $24.25 for each share they own, Nordstrom said on Monday, an increase from a $23 offer made by the parties in September for shares they did not already own.
The Nordstrom family will retain majority ownership of the company with 50.1%, while the remaining 49.9% will be controlled by El Puerto de Liverpool, the second-largest department store retailer in Mexico.
“For over a century, Nordstrom has operated with a foundational principle of helping customers feel good and look their best,” Nordstrom CEO Erik Nordstrom said in a press release.
“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.”
The deal has an enterprise value of $6.25 billion, including debt, and is expected to be partly funded by up to $450 million in borrowings under a new $1.2 billion asset-based bank financing.
The transaction is expected to close in the first half of 2025, the company said.
Nordstrom’s shares were down more than 1% in mid-morning trading on Monday.
Department store chains such as Nordstrom and Macy’s have struggled to grow their sales as middle-income shoppers turned thrifty with essentials getting pricier, instead turning to cheaper alternatives at Walmart, Amazon.com and Target as well as off-price chains including T.J. Maxx.
The Nordstrom family tried to take the company private in 2018, offering $50 per share to buy the company, which at the time was valued at $8.4 billion.
But the company’s board rejected the offer as inadequate. In September, the family tried once again — only this time teaming up with Liverpool to offer shareholders a deal at $23 per share at a valuation of $3.76 billion.
At the time of the proposal, the Nordstrom family owned about 54.6 million shares, or 33.4% stake in the company. Liverpool owned 15.8 million shares, or nearly 10% of the shares.
The Nordstroms have long believed that taking the company private would allow them to make long-term investments and changes in the firm without the pressure and scrutiny that comes with quarterly earnings reports.
The chain was founded as a shoe store in 1901 by John Nordstrom, the great-grandfather of the current CEO and president, Erik Nordstrom.
