Nordstrom, Inc. (NYSE:JWN) could be taken private by the family who founded the department store chain for $23 per share or a total valuation of $3.8 billion.
The Nordstrom family, which owns approximately 33% of Nordstrom shares, and Mexican retailer El Puerto de Liverpool, which owns about 10%, have proposed to acquire the remaining 57% of shares.
The offer price is in line with Nordstrom’s closing price on Tuesday but represents an approximately 34% premium to pre-deal speculation back in March, analysts at Jefferies highlighted.
“We believe the offer price represents a fair value for the company, given its current growth profile and the operating environment,” they wrote in a note to clients.
“While the premium to the previous day is modest, it represents a healthy amount since when the take-private process was first announced.”
If the company agrees to pursue this transaction, it will need to secure the required shareholder approvals for the offer to close, which include a non-waivable majority of shares not owned by the buyer group and two-thirds of overall shares.
Analysts are positive about Nordstrom’s long-term growth potential and strong brand which it needs to balance with a difficult operating environment.
Long-term growth drivers include the return of Nordstrom Rack unit growth, improved merchandising at Nordstrom, continued omnichannel execution, and supply chain cost optimization.
“The company’s multi-brand model in the higher-end Nordstrom line, combined with Nordstrom Rack's off-price business, provides a differentiated offering in the marketplace for customer acquisition, the allocation of inventory, and consumer experience,’ they wrote.
“Nordstrom’s real estate is also relatively insulated among dept stores, given Nordstrom's presence in class A malls and Nordstrom Rack locations in off-mall.”
They have a price target on the stock of $20 and a ‘Hold’ rating.