Nordstrom Rejects Founding Family’s ‘Inadequate’ Take-Private Bid, May End Talks

Well, there goes that idea.

After a belabored attempt to take the company private for the past several months, Nordstrom Inc.’s founding family was dealt a blow on Monday.

The Special Committee of the Board of Directors of Nordstrom Inc. yesterday rejected the acquisition proposal of the group — comprising company co-presidents Blake Nordstrom, Peter Nordstrom and Erik B. Nordstrom; president of stores James Nordstrom; chairman emeritus Bruce Nordstrom; and Anne E. Gittinger — determining that the bid of $50 per share was “inadequate.”

“The special committee has directed its advisers and management not to provide further due diligence information to the group,” the board noted in a statement. “Furthermore, unless the group can promptly and substantially improve the price it is proposing to pay for the company, the special committee intends to terminate discussions.”

In a filing with the U.S. Securities & Exchange Commission on Monday, the Nordstrom family group said its proposed purchase price would represent a premium of 24 percent over the firm’s share price of $40.48 as of June 7, 2017 — the stock price immediately prior to the public announcement of its intention to go private.

The family said it received proposals from 10 major lending firms to provide up to $7.5 billion in debt financing to secure the deal. It also received a commitment from private equity firm Leonard Green to provide up to $2 billion in financing, the group noted.

In June, the Nordstrom family announced plans to find a private buyer for stocks of the company not owned by the family. At the time, the Nordstroms owned 51,830,957 shares, or an approximate 31.2 percent stake, of its common stock. In October, the family said it would suspend those plans until after the holiday season.

Navigating turbulent retail waters as a public company under the highly critical gaze of shareholders has been a challenge for Nordstrom — which has outperformed many of its peers amid industrywide meltdowns — and many other publicly traded firms in recent years.

“Every move made by management to evolve the business is scrutinized by shareholders, and in some cases, longer-term strategic, innovative moves that require testing are not perceived as being of near-term benefit to shareholders,” B. Riley FBR analyst Jeff Van Sinderen told FN in September of Nordstrom’s go-private plans.

On the heels of a strong holiday performance, experts said they believed Nordstrom had a better chance of securing financing for a go-private deal in 2018.

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