Key Takeaways:
- The founding family members of Nordstrom are reportedly considering taking the upscale retailer private.
- They have enlisted Morgan Stanley and Centerview Partners to explore interest from private equity firms in acquiring the company.
- This isn’t the first time the Nordstrom family has looked into privatization; a previous offer in March 2018 was rejected by the company’s board.
- Privatization could provide more flexibility for strategic changes outside of public investor scrutiny.
- Any potential deal would depend on finding willing buyers among private equity firms and negotiating favorable terms.
Shares of Nordstrom Inc. (JWN), the renowned upscale retailer, experienced a notable surge in trading activity on Tuesday, driven by reports indicating that the founding family of the company is actively exploring the possibility of taking Nordstrom private. The news, reported by Reuters and based on information from individuals familiar with the matter, revealed that the Nordstrom family has initiated discussions with financial advisory firms Morgan Stanley (MS) and Centerview Partners to gauge interest from potential private equity investors for a potential buyout of the company.
While the reports have sparked significant market interest and speculation, official comments or responses from Nordstrom, Morgan Stanley, and Centerview Partners are yet to be provided, leaving investors eagerly awaiting further clarification on the matter.
This recent development marks a resurgence of the Nordstrom family’s efforts to privatize the company. In June 2017, a consortium of family members, which notably included current CEO Erik Nordstrom, embarked on a similar journey to explore the feasibility of taking Nordstrom private. However, following a brief period of exploration, the group announced the suspension of active pursuit of a sale for the remainder of the year, with plans to revisit the initiative after the holiday season. Subsequently, in March 2018, Nordstrom’s board ultimately rejected a substantial bid of approximately $8.4 billion proposed by the founding family to privatize the company.
In response to the recent news, Nordstrom’s stock witnessed a significant uptick in trading activity, with shares climbing by 9.2% to reach $18.61 as of approximately 2:45 p.m. ET on Tuesday. Earlier in the trading session, the stock had surged to intraday highs of $19.46, reflecting the heightened investor interest and optimism surrounding the potential privatization discussions.