Nordstrom’s $10B privatization plan hits significant roadblock

Family owners can’t find lenders

Oct.October 02, 2017 08:30 AM

A $10 billion deal to take retailer Nordstrom private is in danger, thanks in part to the recent Toys R Us bankruptcy.

The Nordstrom family, which owns 31 percent of the company’s shares, reached an agreement last month to buy the remaining shares with the help of private equity firm Leonard Green & Partners. But Green’s $1 billion investment was contingent on getting bank financing, which is hard to come by amid reports of a retail crisis.

“The financing has not worked out. I hear that the Nordstrom financing is not done and no one knows if it can be done,” a source told the New York Post. “Toys R Us isn’t good for anyone.”

Under the the proposed deal the Nordstrom family and Green would invest $3.5 billion and borrow another $6.5 billion. They hope that going private would make it easier to invest in online retail and long-term growth.

Nordstrom is doing better than many of its peers and recently increased its sales, according to the Post.

Going private would likely not have an impact on Gary Barnett’s Central Park Tower project, which Nordstrom is anchoring. The retailer has already invested at least $249 million in the project, which could be New York’s first $4 billion condominium. [NYP] — Konrad Putzier

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