Nordtrom Inc. is going private through an all-cash transaction valued at about $6.25 billion in a bet by the founding family that the department-store company will be more successful without the scrutiny and demands of the public market.

As part of the transaction, which is expected to close in the first half of 2025, the family will acquire all of the outstanding common shares of Nordstrom not already owned by the Nordstrom family and Mexican department store chain El Puerto de Liverpool SAB. 

Under the terms of the agreement, Nordstrom common shareholders will receive $24.25 in cash for each share of Nordstrom common stock they hold, the company said Monday. The Nordstrom family will have a majority ownership stake in the company of 50.1%, with Liverpool owning 49.9%. 

Shares in Nordstrom fell 1.5% in US premarket trading. The company’s stock was up 33% so far this year as of Friday’s close, compared with a 12% increase in the S&P Midcap 400 Index.

The board’s acceptance of the offer underscores Nordstrom’s decline from its peak and its subdued growth prospects. In 2018, the board rejected the family’s bid to take the company private at $50 a share as too low.

Nordstrom’s annual revenue, including income from credit cards, peaked at $15.9 billion in the fiscal year ended February 2019. The company was hit hard by Covid-19 and has never returned to its pre-pandemic highs. Nordstrom is expected to report $14.9 billion in total revenue at the end of the current fiscal year, according to a Bloomberg survey of analysts.

Other department-store chains in the US have also struggled as shoppers pivot to online competitors such as Amazon.com Inc., or brand-specific stores such as Louis Vuitton. Executives at Macy’s Inc., for example, are shrinking the company’s store fleet to cut costs, while the owners of Saks Fifth Avenue bought Neiman Marcus Group earlier this year.

The take-private deal will be financed through a combination of rollover equity by the Nordstrom family and Liverpool, cash commitments by Liverpool, up to $450 million in borrowings under a new $1.2 billion ABL bank financing, and company cash on hand. The board also intends to pay a special dividend of up to 25 cents a share in cash contingent on the deal closing.

The transaction must be approved by holders of two-thirds of the company’s common stock and the holders of a majority of the shares not owned by the Nordstrom family or Liverpool.

Erik and Peter Nordstrom, who are members of the company’s board, recused themselves from the vote, which unanimously approved the transaction.

“On behalf of my family, we look forward to working with our teams to ensure Nordstrom thrives long into the future,” said Erik Nordstrom, chief executive officer of Nordstrom.

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