The founding family of high-end retailer Nordstrom Inc has chosen private equity firm Leonard Green & Partners to help take the company private, according to a source familiar with the matter.
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The family and Leonard Green are working on a formal bid that could be submitted in the next few weeks, the source said.
Nordstrom's shares were up 9.6 percent at $49.40 in after-hours trading on Tuesday.
The Nordstrom family group, which owns 31.2 percent of the storied retailer, have been seeking to take the department store operator private, as it struggles to compete amid a industry-wide slowdown.
No deal has been finalized yet and talks could still fall apart, the source told Reuters.
In July, Reuters reported that the family had been offering preferential terms to potential equity partners willing to fund the buyout and Leonard Green was one of the firms in talks to partner with the family.
Earlier in the day, CNBC, citing people familiar with the matter, said Leonard Green would provide the Nordstrom family with about $1 billion in equity to help fund the deal.
The CNBC report also said that the family was talking to banks about raising between $7 billion and $8 billion in debt to finance a deal.
Nordstrom and Leonard Green were not immediately available to comment. (Reporting by Uday Sampath in Bengaluru; Editing by Sriraj Kalluvila)