The special committee of Nordstrom Inc.’s board is ready to move on.
The committee said it terminated discussions with the Nordstrom family, which in June started a process that led it to offer to buy the company for $50 a share. The committee, made up of board members not related to the Nordstroms, nixed that offer two weeks ago, but left open the chance for further negotiations.
But the committee has now sought to shut that door.
“The special committee took this action because it could not reach agreement with the [family] group on an acceptable price for the company,” the retailer said.
The committee said, “Nordstrom is well positioned to capitalize on future opportunities to gain market share through its customer strategy, centered on three strategic pillars: providing a differentiated product offering; delivering exceptional services and experiences, and leveraging the strength of its brand.”
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Nordstrom, which is generally seen as the strongest of the department store retailers, has worked diligently to stay up or ahead of the times and is continuing to spend to sharpen its technological edge.
“The special committee is confident that the company’s ability to leverage its digital capabilities and its local market assets of people, product, and place will support growth across both its full-price and off-price businesses,” the retailer said.
The statement did not include any comment from the Nordstrom family, which controls roughly a third of the business. The family group included copresidents Blake Nordstrom, Peter Nordstrom and Erik Nordstrom, president of stores James Nordstrom, chairman emeritus Bruce Nordstrom, and Anne Gittinger.
To finance the deal at $50, the Nordstroms were willing to put in $2 billion worth of stock they owned, while partner Leonard Green & Partners and its affiliates would have ponied up as much as $2 billion. Beyond that, banks submitted financing proposals which topped out at $7.5 billion in debt. But the debt was said to come at very high interest rates and observers wondered just what impact the interest payments might have on the company should the deal go through.
Shares of Nordstrom slipped 2.8 percent to $47.99 in after-hours trading.