Mexican retail giant El Puerto de Liverpool (Liverpool) has offered a buyout bid to U.S. retailer Nordstrom, seeking to increase its stake in the company to 49.9% with an investment of at least US $1.23 billion. 

El Puerto de Liverpool, owner of the department store brands Liverpool and Suburbia, already owns about 9.9% of Nordstrom’s stock. In September 2022, it acquired the company’s shares as part of a geographic diversification strategy.

The move prompted Nordstrom to activate what is known as a “poison pill” in an effort to protect its shareholders from a hostile takeover. 

Two years later, Liverpool is now part of a “win-win” plot that would make it a part owner of the U.S. retail chain. Members of the Nordstrom family are teaming up with Liverpool to buy 100% of Nordstrom and take the company – which was taken public in 1971 – private.

On Tuesday, CEO Erik B. Nordstrom published a letter to the board of directors stating that the Nordstrom family members own about 33.4% of the company’s outstanding common stock and are willing to offer investors US $23 for each share they own. With around 163.65 million shares outstanding, the buyout bid values Nordstrom at US $3.76 billion. 

In a statement to the Mexican Stock Exchange (BMV), Liverpool said, “The transaction is subject to Nordstrom and the negotiating parties reaching a definitive merger agreement.” If the deal were to close, Liverpool and the Nordstrom family would own 49.9% and 50.1% of Nordstrom’s capital stock, respectively.

The offer represents a nearly 35% premium to Nordstrom’s share price since March 18, when media reports of the proposed transaction first emerged. The retailer’s stock has rallied this year and was trading at just over US $23 on Wednesday.

“That the Nordstrom family have made an offer to buy the department store chain comes as no surprise,” Neil Saunders, managing director of the analytics and consulting company GlobalData, told the Associated Press. Nordstrom family members previously bid to buy out the brand in June 2017 for $50 a share. 

The buyout would be financed through rollover equity and cash commitments by the Nordstrom family and Liverpool, as well as US $250 million in new bank financing.

“The lack of any real premium would, under normal circumstances, make the offer unattractive,” Saunders continued. “However, as a family-run firm the dynamics are slightly different, and it will be up to an independent committee to determine whether this is in the best interests of the company and its investors.” 

As per the details shared by Liverpool, the Mexican company appointed a special committee of independent directors to assess the proposal, which involves a merger between Nordstrom and a U.S. subsidiary of a newly established entity owned by Liverpool and the Nordstrom family. 

This isn’t the first time Liverpool has been involved in a commercial operation with a U.S. company. In 2023, Toys “R” Us parent company WHP Global announced it would launch the U.S. toy brand in Mexico for the first time in alliance with Liverpool.

With reports from Market Watch, Bloomberg and The Associated Press