NEW YORK —The Neiman Marcus Group Inc. on Monday said that its board approved an agreement to sell the luxury retail chain to Texas Pacific Group and Warburg Pincus for about $5.1 billion.

The new owners will acquire all Class A and Class B shares of Neiman for $100 per share in cash. The two investors will own equal stakes in the company upon completion of the transaction, expected to occur by Nov. 1. The deal is still subject to regulatory review and approval of shareholders.

The Smith family, which owns a significant percentage of the equity of the company, entered into a separate agreement to vote its shares in favor of the merger.

The Texas Pacific Group, which has turned around J. Crew, and Warburg Pincus won out over final round bidders Thomas H. Lee Partners and the Blackstone Group, as well as the partnership of Kohlberg Kravis Roberts & Co. and Bain Capital Partners.

Given the premium the new owner is paying, expansion is likely to be a priority.

Neiman Marcus, based in Dallas, has 37 stores around the U.S. and also owns fashion brands such as Kate Spade. For the 2004 fiscal year, total revenues were $3.55 billion, compared with $3.1 billion in the previous year. Net earnings were $205 million, compared with $109 milllion in the 2003 fiscal year.

— Vicki M. Young

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