By Granth Vanaik
(Reuters) -Nordstrom said the founding family behind the department store chain had shown interest in pursuing a possible privatization deal, prompting the company's board to form a special committee of independent directors to evaluate any proposals.
The move by CEO Erik Nordstrom (NYSE 🙂 and President Pete Nordstrom comes at a time when department store chains across the United States are grappling with weak sales as persistent inflation and high borrowing costs have led customers to rethink their discretionary spending.
The Seattle-based retailer said the committee would also evaluate any proposals from other parties.
Nordstrom shares rose 1.6% in extended trading after closing up 4.4% at $18.74 on Thursday. The retailer had a market capitalization of around $3.06 billion, according to LSEG data.
“(They) are going to have to offer a fairly high price, well above the current share price, for the deal to be accepted,” said Morningstar analyst David Swartz.
Reuters had first reported in March, citing sources, that the founding family was seeking to privatize the company, six years after a similar attempt proved unsuccessful.
In 2017, the company announced that family members had formed a group to explore possibilities of going private, including acquiring all of the company's outstanding shares.
But the department store operator rejected that $8.4 billion offer in 2018, saying it was low. He later ended talks with the family, who had also found it difficult to arrange debt financing after failing to agree on an acceptable price.
The founding family collectively owns around 30% of the company's outstanding shares, as of March 2024.
In a filing Thursday, the company said CEO Nordstrom, which has a 7.45% stake in the retailer, could seek debt or equity financing to consummate one or more transactions.
Rival Macy's (NYSE:) has also received several offers in recent months from its investors Arkhouse Management and Brigade Capital to go public.
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