Inc. has a strong case for going private, especially as a company that’s undergoing operational and merchandise changes, and is likely to transform even more in the future.could reach a higher valuation, and preempt an unwanted bid for the company. Given its low stock price, at around $23.50, and the recent string of investor activity at department stores, including at Macy’s,seems vulnerable to takeover offers. Mexico’s Liverpool department store chain has a 9.
“I didn’t want to leverage up the company, which he was saying he wanted to do. I wanted the freedom to continue to invest in the business. We were at that point where we were doing pretty well,” Lundgren said. Icahn eventually reduced his stake in Macy’s, and Lundgren said in that kind of situation, a CEO could spend as much as 30 or 40 percent of his or her time in situations with an activist investor.
“Secondly, it allows them to realize value that the public markets don’t. The public markets have beat up on department stores. They don’t believe in the future of department stores. The valuations are horrible. Whatever the Nordstroms offer for the stock, they’ll need financial partners. The board will have to approve it and shareholders will have to vote on the offer. It will be some premium to the stock price. They will have partners who loan them money or put in equity and get board seats.
While those contacted by WWD see advantages in taking Nordstrom private, a former specialty retail CEO said, “When we went private, I was very much against it. The private equity partners took on huge debt, which hurt the business and they paid themselves a lot of money. They took dividends. None of the financial people knew about merchandising.