Sep 21, 2022 - Economy

Nordstrom adopts poison pill after Mexican retailer buys stake

Illustration of a hand holding gold shopping bags.

Illustration: Allie Carl/Axios

Nordstrom adopted a poison pill after listed Mexican department store chain Liverpool acquired a 9.9% stake for around $295 million, in order to prevent a hostile takeover.

Why it matters: Nordstrom is a perpetual M&A bridesmaid, but always ends up remaining single.

  • The founding family tried to take it private it 2017, but failed to secure adequate financing.
  • Then it partnered with Leonard Green for an $8 billion buyout, but again the banks balked.
  • Now, in response to outside interest from a retailer with a 2x+ market cap, it's building a brick wall.

Details: Were anyone to acquire 10% or more of Nordstrom's stock without board approval, the Seattle-based retailer could issue new shares at a 50% discount to existing 10% or more holders (i.e., the Nordstrom family, which holds a 15.9% position).

  • Other retailers that have adopted poison pills in recent years include Kohl's and Francesca's.

The bottom line: "The Nordstrom family isn't going to give up control without a fight, especially with the company's stock recently hovering near a 52-week low after disappointing Q2 earnings and slashing full-year guidance." — Richard Collings, Axios Pro: Retail Deals

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