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Shares of Nordstrom Inc. (NYSE: JWN) were down 7.3% as of 12:30 p.m. EDT Monday following reports that talks to acquire the department store chain are "faltering."
Nordstrom first surprised investors in early June by announcing it was exploring the possibility of going private, with several members of the Nordstrom family forming a group to look at options for acquiring all outstanding shares of the company's common stock. According to The New York Post on Sunday, however, discussions to that end "are in danger of falling apart" as they still haven't secured financing for the deal.
Sources familiar with the deal told The Post that the surprise bankruptcy of Toys R Us contributed to "anxiety among lenders and the Nordstroms alike." Worse yet, insiders elaborated, the Nordstroms -- who own a roughly 31% stake in the company worth $2.4 billion -- are rightly concerned that if the only way to finance the deal comes with unfavorable terms, it could "kneecap its turnaround plans and endanger the family fortune."
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But that's not to say Nordstrom can't still perform well as a publicly traded company. 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.
So while investors hoping for a juicy buyout premium will need to hurry up and wait to see how the situation develops, patient shareholders would do well to continue to focus on Nordstrom's fundamentals to decide whether the company is worth owning over the long term.
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