Nordstrom Shares Jump on Going Private

Nordstrom Family members have formed a group to explore the possibility of acquiring 100% of the shares outstanding

Shares of department store operators Macy’s, J.C. Penney and Kohl’s are all rising on the news

 

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Shares of Nordstrom Inc. $JWN are higher after the high-end department store said it was exploring a “going private” deal.

Nordstrom, Inc. (JWN) is a leading fashion specialty retailer based in the U.S. Founded in 1901 as a shoe store in Seattle, today Nordstrom operates 354 stores in 40 states, including 122 full-line stores in the United States, Canada and Puerto Rico; 221 Nordstrom Rack stores; two Jeffrey boutiques; and two clearance stores. Additionally, customers are served online through Nordstrom.com, Nordstromrack.com and HauteLook. The Company also owns Trunk Club, a personalized clothing service serving customers online at TrunkClub.com and its seven clubhouses.

The company said member of the Nordstrom family, including Co-Presidents Blake Nordstrom, Peter Nordstrom and Erik Nordstrom; Chairman Emeritus Bruce Nordstrom; President of Stores James Nordstrom and Anne Gittinger, have formed a group to explore the possibility of acquiring 100% of the shares outstanding. Bruce Nordstrom owned 15% of the shares outstanding as of March 17, and Gittinger owned 9.2% of the outstanding shares.

The filing states that prior to agreeing to form the group, Blake Nordstrom and Peter Nordstrom requested that the independent members of the company’s board consider and approve the formation of the group for purposes of a Washington state statute, which, subject to certain exceptions, prohibits a “significant business transaction” between a Washington publicly traded corporation and a 10% or greater group or a corporation affiliated with such a group over a five-year period from formation of the group.

On June 7, a special committee of the board comprised of the independent members of the board approved in advance the formation of the group for purposes of the Moratorium Statute.

In connection with the approval of the Moratorium Statute Waiver, the special committee required that the members of the Nordstrom family who are part of the group enter into a letter agreement with the company containing certain non-disclosure, non-use and standstill provisions.

The standstill provisions of the letter agreement prevent the members of the group from taking certain actions from the date of the letter agreement until January 31, 2019. The letter agreement provides that, after January 31, 2019, the group automatically disbands and may no longer rely on the Moratorium Statute Waiver.

Shares of department store operators Macy’s (M), J.C. Penney (JCP) and Kohl’s (KSS) are all rising on the news.

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The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility.

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