A group of Nordstrom Inc family members is talking to buyout firms about raising $1 billion to $2 billion (786.04 million pounds to 1.57 billion pounds) in equity to fund a potential bid to take the U.S. department store operator private, according to people familiar with the matter.
Nordstrom said on Thursday the family group, which owns 31.2 percent of the 116-year-old retailer, was studying ways to take the company private. The group is now looking for help in funding an offer that would convince the company’s other shareholders to back the deal.
The family group started talks with private equity firms this week, and is expected to spend at least a couple of weeks to select an equity partner, the sources said on Friday, without identifying which firms are in talks with Nordstrom. Once the group has secured equity financing, it will begin to make arrangements for a debt financing package, the sources added.
Nordstrom operates 354 stores in 40 states, which includes its Nordstrom branded full-line stores and off-price discount chain Nordstrom Rack. The company also operates stores in Canada and Puerto Rico.
Seattle-based Nordstrom has long been viewed as the jewel of the department store industry. Its affordable high-end price point distinguishes it from less-expensive peers, such as Macy’s Inc, without making it too exclusive.
Nordstrom has closed fewer stores than its peers. James Nordstrom said on Nordstrom’s first-quarter earnings call in May that the company will consider store closures on a case-by-case basis, rather than through any sweeping measures.
Competitor Neiman Marcus Group, which is owned by buyout firm Ares Management LP and the Canada Pension Plan Investment Board (CPPIB), offers a cautionary tale; it has been working with a financial restructuring adviser this year to cope with its $4.7 billion debt pile, much of which is down to its $6 billion leveraged buyout in 2013.
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