Markets Insider
- Nordstrom spiked more than 6% Friday after a report said the retailer was finalizing plans to go private.
- The Nordstrom family has been trying for months to leave the public markets, but struggled to find adequate debt financing.
Shares of Nordstrom spiked as much as 7% Friday, to a one-year high, after a Reuters report said management was finalizing plans to take the luxury retailer private before it releases earnings on March 1.
The Nordstrom family, which owns 31.2% of the company’s shares, according to regulatory filings, has been working for months to take the company private again,but Friday’s report, citing anonymous sources, is the closest yet to a final deal.
Most recently, the family abandoned plans in late 2017 to leave the public market after failing to secure enough debt to finance the deal. While the company had been in discussions to get roughly $1 billion from the private-equity firm Leonard Green & Partners, the total transaction was estimated to need closer to $10 billion, the New York Post reported.
At the time, the company said it “intends to continue” attempting to go private “after the conclusion of the holiday season.” The holiday’s have come and gone, and it appears the Nordstrom family believes the industry has forgotten last year’s anxiety.
Much of the trepidation around the debt financing reportedly stemmed from the recent Toys R Us bankruptcy. The long-standing toy retailer was driven to that end amid the ongoing retail apocalypse, which has seen emerging juggernauts like Amazon threaten the long-term future of traditional brick-and-mortar retailers.
With all those industry headwinds swirling, you can hardly blame financiers for shying away and electing to deploy their capital elsewhere — or not at all.
Shares have gained 17% in the past year.
Joe Ciolli contributed to this report.
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