Axios Pro Exclusive Content

Cash is king as Saks pursues Neiman

headshot
Dec 6, 2023
Shoppers in front of a Neiman Marcus inside an indoor mall

Photo: Mark Makela/Getty Images

Saks' rejected bid for Neiman Marcus consisted of a $2.1 billion cash component, with up to $1 billion in subordinated debt financing, a source close to the deal tells Axios.

Why it matters: Neiman wants a cleaner, mostly cash deal and the two parties remain on opposite sides of the deal table, sources tell Axios.

Zoom in: HBC-owned Saks' bid values Neiman at around $3 billion, two sources say.

  • Saks' offer did not include an offer of equity, or shares in the merged entity, to Neiman's owners (which include PIMCO, Davidson Kempner and Sixth Street), they say.
  • The offer called on the owners to participate in $500 million to $1 billion of subordinated debt financing, the first source says.

Catch up fast: Neiman Marcus hired JPMorgan as its financial adviser two years ago when it first began receiving offers, the first source says.

  • It has fielded multiple offers, but was not running a formal auction process, both sources say.

What's next: A deal is unlikely to be struck until next year, if it happens at all, as both retailers focus on the holiday season.

  • Negotiations may pick up in early 2024, the sources say.

The intrigue: Pending a more favorable interest rate environment, Neiman Marcus could even run a formal auction process, the first source posits, adding negotiations with HBC aren't exclusive.

The bottom line: A deal won't get done at $2.1 billion, but perhaps at $2.5 billion, with something extra to sweeten the pot, the first source says.

  • It's only a matter of time before Neiman Marcus and Saks merge, the second source says.

JPMorgan declined to comment, while the remaining parties did not immediately respond to a request for comment.

Go deeper