Nordstrom to go private in $6.25 billion deal with Nordstrom family and Mexican retail group

Century-old department store Nordstrom has agreed to be acquired and taken private by Nordstrom family members and a Mexican retail group in a $6.25 billion deal that comes as department stores are facing pressure from discount chains and other competition.

Nordstrom shareholders will receive $24.25 in cash for each share of Nordstrom common stock they own, or about $4 billion in all, representing a 42% premium on the company's stock as of March 18, which is the day before media reports of a potential transaction began to circulate. The Nordstroms will also pick up more than $2 billion in debt. 

As a private business, the Nordstroms may have more leeway in reviving a department store chain that, like others, has looked to revive lackluster sales for years. Other publicly traded retailers, including Macy's and Kohl's, have faced pressure from major investors in order to provide bigger returns to investors, while also attempting to fend off competition from lower-cost rivals such as Walmart and Amazon.com.

"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," noted GlobalData analyst Neil Saunders in a Monday research note.

He added, "The [Nordstrom] family have the talent and ability to enact change as does El Puerto de Liverpool. They will likely run the business as a retailer rather than as some kind of financial play thing which, in our view, is a very positive thing for the long term health of the brand."

Shares of Nordstrom fell 36 cents, or 1.5%, to $24.17 in late morning trading.

Nordstrom family, El Puerto de Liverpool's offer

That offer announced Monday tops the previous $23-per-share bid that the Nordstrom family and Mexican retail group, El Puerto de Liverpool, made in September.

The board also plans to authorize a special dividend of up to 25 cents per share, based on Nordstrom's cash on hand immediately prior to and contingent on the close of the transaction.

The deal is expected to close in the first half of 2025, at which time the company's shares will no longer trade publicly.

Nordstrom's board of directors unanimously approved the the proposed transaction, with members Erik and Pete Nordstrom, part of the Nordstrom family taking over the company — recusing themselves from that vote.

Following the close of the transaction, the Nordstrom family will have a majority ownership stake in the company. Erik and Pete Nordstrom are the fourth-generation leadership at the Seattle retailer, which was founded in 1901 as a shoe store. Erik is the company's chief executive and Peter is president.

After opening 23 new stores so far this year, the company now operates a combined 381 Nordstrom and Nordstrom Rack stores in the U.S.