Nordstrom shareholders express approval for privatization

Nordstrom Inc. shareholders have approved the company's private plan.

The green light for shareholders is expected to be disclosed in Securities and Exchange Commission filings on Friday after a special shareholder meeting was held at 9 a.m. Pacific time.

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The document shows that the merger agreement was approved by the company's shareholders at the special meeting based on preliminary estimates from the special meeting provided by the company's attorney Innisfree M&A Inc. ”

The Seattle-based company expects the deal to be completed around Tuesday or Tuesday.

In December, Nordstrom's board approved a deal between the Nordstrom family and Mexican retailer El Puerto de Liverpool to acquire all outstanding shares in Nordstrom owned by Nordstrom. It is an all-cash transaction with an enterprise value of about $6.25 billion, giving Nordstroms 50.1% control and Liverpool 49.9%. Nordstrom common shareholders will receive $24.25 in cash per common share held. The deal represents a premium of about 42% on March 18, 2024, the last trading day for the company's unaffected stock price, which is the media speculation that a potential transaction is expected.

Nordstrom is the chief merchandise officer by brothers Erik and Pitt, CEO and CEO and Chief Brand Officer, and their cousin Jamie.

Traditional department stores such as Nordstrom and Macy's have been working to maintain market share as middle-income families have been shifting most of their shopping to discounts and e-commerce. Restored the gloss of Nordstrom Department stores and escaped from the glare of Wall Street, Nordstrom's private foundation. Privately owned Nordstrom is not expected to be very different from current priorities, especially its aggressive expansion of rack low-price chains, pursuing greater digital growth and much-needed COMP gains from Nordstrom’s premium department stores. So far, the strategy has produced some results.

Wall Street has been enjoying the dim view of Nordstrom and most department stores for a long time. Nordstrom's Manhattan Flagship has been growing in popularity, but the company has spent far more than expected to build a store, which unfortunately opened before the pandemic.

By taking its business private, Nordstroms can observe for a long time and make necessary investments and changes from the review of public markets. They will likely accelerate investments in commodity improvements and storage upgrades and take on more fashion risks, but they can also save time and money by stopping production of quarterly reports and having conference calls and meetings with investors. They will deal with less scrutiny, fewer stakeholders and regulatory requirements and can be more decisive in smaller constituency reports. Another benefit is that private companies are less transparent, so competitors know less about what they are facing.

Nordstrom does take on more debts by privately. Nordstrom previously said the deal would be financed through a combination of the Nordstrom family and Liverpool, Liverpool’s cash commitments, up to $450 million in borrowings, and a new $1.2 billion in asset rebate loans as well as company cash. Nordstrom's debt is $2.7 billion. The transaction was $24.25 per share, the stock was worth $4.1 billion and the enterprise value (including debt) was $6.3 billion.

Liverpool will have a seat on the board and will have an impact on Nordstrom's development. Partners can also help each other add some brands to products they haven't brought yet, although the Liverpool store classification is more moderate.

Experts have not seen the partnership that led to Nordstrom's expansion to Mexico, nor did Liverpool enter the United States. Liverpool operates 310 stores of Liverpool and suburban banners, 119 specialty boutiques and 29 shopping malls throughout Mexico. Liverpool has 78,000 employees.

Assuming that if the Nordstrom family decides to leave the business or continue to work there, but waives control, Liverpool will be in the main position of control. Another possibility is that the family can decide to open the company again and return the sale of the stock in the IPO. It is not that rare for companies to be public, private and re-publish. Nordstrom was published in 1971.

Founded in 1901, the company was a shoe retailer, operating 93 Nordstrom department stores, about 300 Rack-high stores and 6 Nordstrom Locals, which can operate as a service center. The retailer has been able to maintain its reputation for excellent service in recent years while losing some of its merchandise advantages.

Liverpool is located in the Santa Fe area of Mexico City and was founded in 1847 by Jean Baptiste Ebrard. The department store chain is sometimes called Macy's, although its stores sell more than Macy's. The company also owns a 50% stake in Unicomer, a company that owns a retail chain in 26 Latin American countries.

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