CNBC reported after Tuesday's close that department store retailer Nordstrom (JWN 47.95, +2.90) could be on the cusp of working out a deal to go private. Specifically, CNBC said people familiar with the matter said private equity firm Leonard Green & Partners is close to getting the nod from Nordstrom family members to orchestrate a go-private transaction.
It isn't "new" news that Nordstrom family members, who own 31.2% of the retailer's stock, are exploring the option of taking the company private.
Their interest has been sparked by the upheaval in the retail industry, which has stemmed from the rise of online shopping and changing consumer buying preferences that have made it increasingly difficult for mall-based retailers of apparel and accessories to compete as effectively as they once did.
The aim of the Nordstrom family, reportedly, is to carry out changes necessary to improve the company's competitive position without being subjected to the quick-strike appraisal of the public stock market.
Shares of JWN, which are down 6.0% year-to-date, have fared better than many other retailers in 2017; however, the impact of changes in the retail industry is reflected more acutely in the fact that JWN is down approximately 40% from its 2015 high.
According to the CNBC report, Leonard Green would provide about $1 billion in equity to help fund a deal for Nordstrom to go private. Nordstrom, meanwhile, is said to be talking to banks about raising $7 billion to $8 billion of debt to finance the deal.
Analysts have expressed some skepticism about a deal to take the company private coming to fruition. Nevertheless, the prospect of a deal coming together with a reputable private equity firm has been enough to whet the appetite of investors.
Shares of JWN are up 6.4% in pre-market trading.