American department store Nordstrom is said to be evaluating financing proposals from banks to take the luxury retailer private, according to sources, taking up the sale stick for a second time after the Nordstrom family started exploring the possibility of privatization last summer, but failed to negotiate a deal.
While exact details aren’t known, including sales figures and potential bidders, Nordstrom is said to have an enterprise value of $10.4 billion, according to S&P Capital IQ. This figure includes $8.4 billion in company shares and total debt of $2.7 billion.
The company is said to be able to hold as much as $7 billion worth of debt.
The takeover news comes on the back of a positive Christmas revenues period for Nordstrom.
For the key holiday period, Nordstrom reported its comparable sales rose 1.2% in the nine weeks ended December 30, compared with the same period last year. This lift was helped by growth at Nordstrom Rack and online. At the time of reporting last month, the department store chain raised its full-year earnings forecast to $2.90- $2.95 per share from $2.85-$2.95 per share.
The next hurdle to jump falls on March 1, when Nordstrom will report fourth-quarter earnings and update investors on its financial performance.
However, the vibe from investors has remained positive and Nordstrom shares have gained close to 30% since Thanksgiving.
Nordstrom first announced in June that the family group, which owns a 31.2% stake, was considering taking the company private. The group partnered with buyout firm Leonard Green & Partners, but held off the process in October, due to the impending Christmas sales period.
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Nordstrom’s isn’t the only North American retailer to launch into privatization talks. Canadian rival Hudson’s Bay Co, owner of the Saks Fifth Avenue and Lord & Taylor retail chains, also explored going private last year, without progressing further.