NEW YORK — The sale of Neiman Marcus Group is picking up steam, with The Blackstone Group and Apollo Advisors among those said to be well into the due diligence process.
There was also mounting speculation last week that given the high price Neiman’s will command, a consortium will be formed to buy the company. Neiman’s is expected to be sold at between $4 billion and $5 billion. In its last fiscal year the firm posted over $3.5 billion in sales.
“This would be too big of a deal for one player,” said a source familiar with the investment groups exploring Neiman’s. The source added that six firms, including Blackstone and Apollo, have been conducting due diligence on Neiman’s. Blackstone and Apollo could not be reached for comment.
But a deal is still a few months off. The source said selling Neiman’s is roughly a six-month process that’s about a third of the way complete. Neiman’s announced March 16 that it hired Goldman Sachs to explore various strategic alternatives to enhance shareholder value, including the possible sale of the company.
The Smith family, which controls Neiman’s by owning 15 percent of the shares outstanding, could decide to cash out through a secondary offering. However, one investment banker said that would be tough to do in the aftermath of the attempt now to sell the company outright. Investors would be spooked, said the banker.
According to informed sources, potential bidders have already seen presentations by Burt Tansky, president and chief executive of the Neiman Marcus Group. He reportedly held one-on-one meetings with financial suitors earlier this month in New York.
Last week, suitors were down in Dallas, at Neiman’s headquarters, receiving detailed presentations by senior executives and merchants from the Neiman Marcus Group divisions, which include Neiman Marcus stores and Neiman Marcus Direct. The group also operates Bergdorf Goodman in New York. Neiman’s officials would be pushing category strengths and Neiman’s growth potential.
After all the meetings and presentations are completed, preliminary bids will be submitted. Those with acceptable bids in the range Neiman’s wants, will advance in the due diligence process, getting a chance to open Neiman’s books.
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