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 with the industry being squeezed by discount chains and other competition. Public companies are under a lot more scrutiny and if private, Nordstrom might have more leeway in reviving a department store chain that has been attempting to reinvigorate sales for years.
Nordstrom shareholders will receive $24.25 in cash for each share of Nordstrom common stock, or about $4 billion in all, representing a 42% premium on the company’s stock as of March 18, when a potential transaction was reported by the media. The acquiring group will also pick up more than $2 billion in Nordstrom debt.
The traditional department stores have suffered in the face of withering competition from giants like Walmart and Target, as well as a host of fast-fashion brands and Amazon.com . Nordstrom rivals Macy’s and Kohl’s have been pressured by major investors to make huge changes in order to return more profit to shareholders.
Sales at Nordstrom have essentially flatlined over the past decade or so and it announced last year that it was closing all of its Canadian stores and cutting 2,500 jobs as it winds down operations in the country. Nordstrom first announced plans to expand to Canada in 2012 and opened its first store in Calgary at CF Chinook Centre in September 2014. The offer announced Monday tops the previous $23-per-share bid that th.
