Mexico's Liverpool Family to Acquire Nordstrom

US department store chain Nordstrom is set to go private in a MX$126 billion (US$6.25 billion) acquisition led by Mexican retailer El Puerto de Liverpool and the Nordstrom family. 

The transaction, announced on Monday, values Nordstrom shares at U$24.25 each, a 42% premium over the stock’s closing price on March 18, before reports of the deal surfaced. This offer represents an increase from the US$23 per share proposal made by the buyers in September. Nordstrom’s shareholders will receive the payment in cash, with the deal expected to close in the first half of 2025, as reported by Reuters.

The Nordstrom family and Liverpool collectively owned nearly 44% of the company as of September. The acquisition will give the family a majority ownership stake in the retailer.

The US$6.25 billion enterprise value of the deal includes Nordstrom’s debt. It will be partially financed through U$450 million in borrowings under a new U$1.2 billion asset-based bank facility. Morgan Stanley & Co and Centerview Partners served as financial advisors to Nordstrom’s special committee, while Moelis & Company advised the Nordstrom family.

Nordstrom’s board of directors unanimously approved the acquisition. “Given the board’s approval and lack of any apparent opposition, I believe that the deal will go through at the proposed price,” says David Swartz, Analyst, Morningstar.

Since reports of the potential transaction in March, Nordstrom’s stock has surged 43%, reversing earlier losses in the year. However, shares dipped nearly 1% in early trading on Monday following the announcement. 

Traditional department stores like Nordstrom and Macy’s have struggled to maintain market share as middle-income shoppers increasingly turn to discount retailers and e-commerce. Nordstrom had previously attempted to go private six years ago, but the effort was unsuccessful. This deal comes amidst broader changes in the retail sector, including the collapse of acquisition talks between Macy’s and an investor group earlier this year.

By aligning with Mexico’s Liverpool, a leading retailer in Latin America, Nordstrom aims to leverage new markets and customer bases to solidify its financial foundation.