N’strom deal dead
Finance fears doom plan to go private
Nordstrom, the struggling upscale department store, will not be going private anytime soon.
The chain’s founding family on Monday called off plans to buy the 69 percent of the $7 billion chain it didn’t already own — citing difficulties in financing the deal.
The Post reported exclusively earlier this month that the Nordstrom family and its backers had run into serious headwinds in trying to bankroll the deal.
In a treacherous retail environment, some lenders were dangling interest rates of up to 12 percent to complete the deal, The Post reported on Oct. 3, citing sources close to the deal.
But the proposed $10 billion deal was also a victim of a leak, sources said.
Leonard Green & Partners, which was to supply equity financing, was reluctant to fund a deal worth more than $47 a share, sources said.
In the wake of a story Sept. 12 that Leonard Green was helping to finance the deal, shares of the Dallas company spiked to nearly $48 a share from $44.72.
The rising share price — along with the high interest rates — all but scotched the deal, sources said.
The Nordstrom family owns 31 percent of the eq- uity in the company.
Their goal was to get a deal agreement by Sept. 30, sources said.
The Nordstrom family, in Monday’s announcement, said they would suspend active exploration of the move for the balance of the year.
Nordstrom shares fell 5.3 percent, to close at $40.40.
“You have to ask, ‘ Why does Nordstrom want to do this to begin with?’ ” said Gordon Haskett analyst, Chuck Grom. “Some people have said they need to invest more in their business to make it viable.”
“The next 10 weeks are probably the most important weeks of the year for them,” Grom added, alluding to the upcoming holiday shopping season. “They don’t need to be distracted. If they have a good fourth quarter, the odds improve for them to get the funding.”