Luxury retailer Neiman Marcus has filed to go public. Bloomberg’s Lee Spears and Cotton Timberlake report that the chain is starting with a value of $100 million in order to calculate the fees associated with its initial public offering. However, the final amount could and probably will change.
Details On Neiman Marcus’ IPO Are Slim
The IPO filing does not indicate many details about the company’s plan. The $100 million that the company listed was just a placeholder amount, and it did not list its possible IPO price range. It also didn’t list the number of shares it would offer, the exchange it would list on or the ticker symbol it would like to use.
Neiman Marcus Investment Unwound
By offering an IPO, the private-equity firms which invested in the company before the financial crisis will be able to start unwinding their investment. Warburg Pincus and TPG Capital doled out approximately $5 billion in 2005 at the beginning of the biggest buyout boom in history, according to Bloomberg. The owners of Neiman Marcus may seek an $8 billion valuation in the sale, according to Bloomberg’s sources.
The IPO filing indicates that both Warberg Pincus and TPG Capital plan to sell some of their shares in the company. That would reduce their ownership in the retail chain. The two firms led the group which bought out the luxury retailer in 2005, investing $1.23 billion, which amounted to a more than 80 percent stake in the company. The filing doesn’t say, however, whether Neiman Marcus will raise cash through the offering.
Filings indicate that shareholders of the company received $449.3 million in dividends last year. If Neiman Marcus did receive an $8 billion enterprise valuation, then the company’s investors would receive significant returns on their investments.
Neiman Marcus And Saks
According to Bloomberg, KKR & Co. L.P. (NYSE:KKR), which considered investing in Saks Inc (NYSE:SKS), also considered trying to merge the chain with Neiman Marcus. Sources had said both companies would be able to slash their expenses by closing stores if they merged. Also Saks hired Goldman Sachs Group Inc (NYSE:GS) last month to explore a possible buyout for that company, so a merger between the two luxury chains may not be too far-fetched.