Talks to take Nordstrom private are faltering

Talks to take Nordstrom private are faltering”

Discussions to take Nordstrom private are in danger of falling apart.

"The financing has not worked out".

NEW YORK-Nordstrom Inc. fell as much as 6.7 per cent in early trading amid growing concerns about a deal to take the upscale department-store chain private. "I hear that the Nordstrom financing is not done and no one knows if it can be done", a top retail industry expert with direct knowledge of the situation said, adding, "Toys R Us isn't good for anyone".

The newspaper said that the family has been having difficulties putting together the deal, estimated to be worth above US$10bn, the sources said. But the agreement with Green was contingent on arranging bank financing to fund the rest of the buyout, which could have had a total value of more than $10 billion. Also, the Nordstrom family is reportedly anxious a heavily leveraged deal could disrupt the company's turnaround plans and threaten the family's fortune, the publication added.

Officials at Nordstrom and Leonard Green didn't respond to requests for comment on Sunday. The company's off-price store, Nordstrom Rack, has been performing well, and there are now more Rack stores than the traditional department stores. As fellow Fool Jeremy Bowman pointed out last month, Nordstrom was the only major department store chain to deliver positive comparable-store sales in its most recent quarter; revenue in the second quarter climbed 4% year over year to $3.79 billion, with a 1.7% increase in comps driven partly by the success of its anniversary sale event. Still, they remain slightly below where they started the year.

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