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Nordstrom Stock Edges Higher on One-Year Poison PillNordstrom Stock Edges Higher on One-Year Poison PillBarron's (Online); New York Nordstrom stock is inching higher after the company said it had adopted a one-year shareholder-rights plan. Before the opening bell on Tuesday, Nordstrom (ticker: JWN) said its board of directors had approved the plan, also known as a poison pill, a typical response to an unsolicited attempt to acquire a company. Nordstrom said the move is meant to protect the interests of the company and its stakeholders, and allow it "sufficient time to make informed, deliberate decisions." Nordstrom said, though, that the move wasn't in response "to any specific takeover bid or other proposal to acquire control of the Company, and is not intended to deter offers that are fair and otherwise in the best interests of all Nordstrom shareholders." It expires on Sept. 19, 2023. Nordstrom is no stranger to buyout rumors, but those typically haven't involved outside bidders. Reports that the founding family, which still has a substantial stake in the firm, with Erik Nordstrom as chief executive officer, has wanted to take the company private have surfaced repeatedly over the years, but no agreement has been reached. While in the past, companies typically adopted longer-duration poison pills, more recently some have moved to one-year plans, given that activist investors, who often prompt companies to use shareholder-rights plans, tend to have shorter investment horizons. A one-year pill can signal a company's intentions to investors and activists, without a prohibitively long timeline that would restrict potential future options. Nordstrom may be hoping the retail landscape will look stronger a year from now, allowing companies' valuations to make a comeback. For much of the first half of the year, stock in Kohl's (KSS) enjoyed a takeover premium, but the department- store chain terminated negotiations this summer amid reports that bidders had significantly lowered their offers . The wealthier people who shop at Nordstrom haven't scaled back their buying in response to high inflation as much as customers of many other retailers, but the company nonetheless had to lower its outlook last month, reversing a rosy forecast it issued this spring. Department-store stocks in general have been hit hard by the difficult retail environment, which has prompted many to slash their financial forecasts. However, Nordstrom is off just over 18% in 2022, just outpacing the S&P 500, while Macy's (M) and Kohl's are down closer to 40%. Nordstrom stock was up 0.1% to $19.65 in early trading. |
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