NEW YORK — The Neiman Marcus Group hung a for-sale sign on the door Wednesday, and shoppers are looking.
Neiman’s said Wednesday morning that it hired Goldman Sachs to seek “strategic alternatives,” for the luxury retailer. With more than $100 billion in the American private equity market available right now and countless billions available overseas, the group is ripe for either an outright acquisition or at least someone buying enough shares to gain control of the board.
WWD reported on Feb. 22 that the Smith family, which controls the largest percentage of Neiman Marcus Group’s voting stock, was looking at ways to realize the value of its shareholding.
While sources said at the time that the Smiths were considering a secondary offering, those now said to be kicking the tires of the high-end department store include LVMH Moët Hennessy Louis Vuitton and even Federated Department Stores, which is in the middle of a $17 billion deal to buy May Department Stores. But a more likely scenario is a consortium of financial players coming together to buy the chain.
Investors Take Stock
Either way, Neiman’s announcement drove up its stock price Wednesday by 15 percent. As Wall Street digested news of the potential sale, and a possible bidding war as a result, shares of the retailer’s Class A stock jumped Wednesday to $86.14 in trading on the New York Stock Exchange while the Class B stock soared 17 percent to $84.80. The gains pushed both classes of stock to 52-week highs. Nearly 3.8 million shares changed hands Wednesday. The average daily trading volume is just 183,500 shares.
Stacy Turnof, analyst at Merrill Lynch, wrote in a research note that the stock price could rise as high as $100 a share, which would make the entire company worth $4.9 billion. Shares of Neiman Marcus already surpassed Turnof’s low-end estimate of $80 a share in Wednesday’s trading session. For the second quarter ended Jan. 29, Neiman Marcus reported 49.4 million diluted shares outstanding.
Turnof noted that Richard Smith, Neiman’s chairman, has made public his interest in selling his shares. The analyst said the Smith family owns about 15 percent of the shares outstanding, and she believes that Smith, 81, “could be the catalyst behind the company’s decision to ‘consider strategic alternatives.’”
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