Nordstrom announced it has signed a definitive agreement under which Erik, Pete, Jamie Nordstrom and other members of the Nordstrom family and El Puerto de 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 about $6.25 billion on an enterprise basis. Following the closing of the deal, the Nordstrom Family will have a majority ownership stake in the company.
Under the terms of the deal, 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% 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. 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 prior to and contingent on the close of the transaction. Upon completion of the transaction, Nordstrom will become a private company.
Nordstrom’s Board of Directors, 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 that led the review and negotiation of this transaction. And 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 deal 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 deal 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. And 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 deal, 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 closing of the transaction, Nordstrom will be owned 50.1% by the Nordstrom Family and 49.9% by Liverpool.
Morgan Stanley and Centerview Partners are acting as financial advisors to the special committee, and Sidley Austin and Perkins Coie are acting as legal counsel to the special committee. Moelis & Company is acting as financial advisor and Wilmer Cutler Pickering Hale and Dorr, Lane Powell and Davis Wright Tremaine are acting as legal counsel to the Nordstrom Family. J.P. Morgan Securities is acting as financial advisor and Simpson Thacher & Bartlett and Galicia Abogados are acting as legal counsel to Liverpool.
KEY QUOTES:
“The special committee of the Nordstrom Board of Directors reviewed this proposal against the Company’s standalone prospects for growth. 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.”
– Eric Sprunk, chairman of the special committee
“The Nordstrom Board regularly considers alternatives to enhance value, culminating in this most recent process. I want to thank the special committee for their diligent and thorough work evaluating and negotiating this transaction over the past several months.”
– Brad Tilden, chairman of the Nordstrom Board
“For over a century, Nordstrom has operated with a foundational principle of helping customers feel good and look their best. 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.”
– Erik Nordstrom, chief executive officer of Nordstrom
“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.”
– Pete Nordstrom, chief brand officer of Nordstrom
“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. We are honored to partner with the Nordstrom Family and the Company’s talented team as they continue to deliver outstanding service to customers.”
– Graciano F. Guichard G., executive chairman of the Board of Directors of Liverpool
