Nordstrom Adopts Poison Pill After Mexican Retailer Buys Stake
Nordstrom Inc.
JWN -2.75%
adopted a so-called poison pill to prevent outsiders from boosting their stake in the business after a Mexican company acquired a 9.9% stake in the upscale U.S. retailer.
A roughly $300 million investment made El Puerto de Liverpool SAB—which operates high-end department stores in Mexico—the second largest shareholder after the founding Nordstrom family, which owns about 30% of the Seattle company.
Poison pills, also called shareholder rights plans, are legal maneuvers that make it hard for shareholders to build their stakes beyond a set point by triggering an option for others to buy more shares at a discount.
In the case of Nordstrom, the company adopted a shareholder rights plan that will issue new shares if Liverpool or anyone else acquires a stake of 10% or more in a transaction not approved by Nordstrom’s board. Existing holders of more than 10% of the company’s stock, including the Nordstrom family, will be grandfathered in.
Liverpool said in a statement on Sept. 15 that it had spent 5.9 billion pesos, or about $295 million at current exchange rates, to purchase Nordstrom stock as a means to diversify geographically. The company’s securities filing indicated it was a passive investment.
“We wouldn’t rule out the possibility that [Liverpool] might increase its stake and take on a more active role over the long-term,” wrote Citi analyst Sergio Matsumoto in a note to clients. “Meanwhile, the two entities may forge a closer relationship.”
In 2016, Liverpool acquired the Suburbia clothing chain from Walmart de Mexico SAB for about 19 billion pesos. The company operated 122 department stores, 164 Suburbia stores as well as 28 shopping malls, according to its most recent annual report.
Liverpool has a market capitalization of around $6.5 billion, compared with a roughly $3 billion valuation for Nordstrom.
The Nordstrom family offered to take the company private in 2017 for about $50 a share, but abandoned the transaction after it had difficulty securing financing. The company’s shares were recently trading around $19.50.
Write to Suzanne Kapner at [email protected]
Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8
Nordstrom Inc.
JWN -2.75%
adopted a so-called poison pill to prevent outsiders from boosting their stake in the business after a Mexican company acquired a 9.9% stake in the upscale U.S. retailer.
A roughly $300 million investment made El Puerto de Liverpool SAB—which operates high-end department stores in Mexico—the second largest shareholder after the founding Nordstrom family, which owns about 30% of the Seattle company.
Poison pills, also called shareholder rights plans, are legal maneuvers that make it hard for shareholders to build their stakes beyond a set point by triggering an option for others to buy more shares at a discount.
In the case of Nordstrom, the company adopted a shareholder rights plan that will issue new shares if Liverpool or anyone else acquires a stake of 10% or more in a transaction not approved by Nordstrom’s board. Existing holders of more than 10% of the company’s stock, including the Nordstrom family, will be grandfathered in.
Liverpool said in a statement on Sept. 15 that it had spent 5.9 billion pesos, or about $295 million at current exchange rates, to purchase Nordstrom stock as a means to diversify geographically. The company’s securities filing indicated it was a passive investment.
“We wouldn’t rule out the possibility that [Liverpool] might increase its stake and take on a more active role over the long-term,” wrote Citi analyst Sergio Matsumoto in a note to clients. “Meanwhile, the two entities may forge a closer relationship.”
In 2016, Liverpool acquired the Suburbia clothing chain from Walmart de Mexico SAB for about 19 billion pesos. The company operated 122 department stores, 164 Suburbia stores as well as 28 shopping malls, according to its most recent annual report.
Liverpool has a market capitalization of around $6.5 billion, compared with a roughly $3 billion valuation for Nordstrom.
The Nordstrom family offered to take the company private in 2017 for about $50 a share, but abandoned the transaction after it had difficulty securing financing. The company’s shares were recently trading around $19.50.
Write to Suzanne Kapner at [email protected]
Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8
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