We’re closing in on two weeks since it was unveiled that the Nordstrom family and the Mexican department store chain Liverpool made a bid for JWN at $23/share.
When the bid was unveiled the price of the stock was the same as the bidding price, $23. However, it’s been close to half a year since it was announced that a special committee would be made to consider a buyout offer from the family and at that time the price of the stock was $17. So, $23 actually means a 35 % premium compared to March 2024 when it was announced a buyout offer would come – but now that we have the offer six months later, it may be to the family’s own misfortune that the price has gained 35 % making the offer perhaps seem like lowballing. But, did the price actually only go up because investors knew a buyout offer was underway? No one knows but Nordstrom has outperformed peers in recent quarters and delivered on earnings when peers haven’t. Furthermore, during these six months inflation has gone down and a rate cut is imminent indicating smoother sailing for retail.
Today, two weeks after the bid was unveiled, the price seems anchored around $23. The Board needs to approve the bid for any sale to be completed. Macy’s and Kohl’s have also received bids in recent times but in both cases there have been significant premiums ranging from 30-40 %. Both companies declined despite these premiums. Nordstrom is a little different seeing as the family owns a big part of the company. However, the Board is perfectly capable of declining offers from the family as became clear just 8 years ago when the board declined an offer from the family for $50/share.
Opinions and ideas on what’s going to happen to JWN in the days, weeks, months and years to come? Will the Board accept $23? If not, what will that do to the price of the stock? Will it crash or be unaffected?
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