Neiman Marcus Group Inc. is planning overtures to a handful of sovereign-wealth funds about a possible buyout of the luxury retailer, said people familiar with deliberations.
Dallas-based Neiman plans to contact funds including the Government of Singapore Investment Corp., the Kuwait Investment Authority and the Qatar Investment Authority to gauge interest in buying the century-old department-store chain, the people said.
The plans are at an early stage, the people said, and a sale may not materialize.
Neiman within the past week hired bankers at Credit Suisse Group AG (CS, CSGN.VX) to explore a sale or public offering of the company's stock, the people said.
Neiman, acquired by private-equity firms TPG and Warburg Pincus LLC in 2005 for $5.1 billion in cash and debt, plans to limit the number of overtures to potential buyers in an effort to keep the sales process relatively exclusive, one of the people said.
Singapore's fund, known as GIC, and Kuwait's fund, known as KIA, are familiar to TPG. Both bought minority stakes in TPG in 2011.
TPG and Warburg have somewhat differing views on the best way to exit their investment in Neiman, the people said. Warburg is keen to take Neiman public soon, while TPG prefers to test the market first to see if they can find a buyer willing to pay a good price, the people said.
Despite being more enthusiastic about pursuing an IPO, Warburg supports TPG's desire to seek outright buyers first, the people said Private-equity owners often pursue so-called dual-track processes to exit investments, exploring a sale and a public offering simultaneously.
Buyout firms often prefer to sell their companies outright, rather than pursue a public stock offering, in the hopes of fetching an attractive price that realizes their investment returns in one fell swoop.
While public offerings can also reap profits for private-equity owners, stock sales happen over time and the share price doesn't always cooperate with the sellers' timetable.
Bankers uninvolved said that because Neiman Marcus is considered a trophy asset with a wealthy customer base, it could command a premium even as the universe of potential buyers is slim. TPG and Warburg paid 12.5 times operating earnings when they acquired the company in 2005 for $5.1 billion.
Neiman's earnings steadily declined in subsequent years, as the recession hampered demand for luxury goods.
The company lost money in 2009 and 2010 and returned to profitability in 2011, according to filings for its publicly-traded debt. For the fiscal year ended July 2012, Neiman's operating earnings totaled $404 million, roughly flat with the $409 million earned in 2005.
foxbusiness.com
Dallas-based Neiman plans to contact funds including the Government of Singapore Investment Corp., the Kuwait Investment Authority and the Qatar Investment Authority to gauge interest in buying the century-old department-store chain, the people said.
The plans are at an early stage, the people said, and a sale may not materialize.
Neiman within the past week hired bankers at Credit Suisse Group AG (CS, CSGN.VX) to explore a sale or public offering of the company's stock, the people said.
Neiman, acquired by private-equity firms TPG and Warburg Pincus LLC in 2005 for $5.1 billion in cash and debt, plans to limit the number of overtures to potential buyers in an effort to keep the sales process relatively exclusive, one of the people said.
Singapore's fund, known as GIC, and Kuwait's fund, known as KIA, are familiar to TPG. Both bought minority stakes in TPG in 2011.
TPG and Warburg have somewhat differing views on the best way to exit their investment in Neiman, the people said. Warburg is keen to take Neiman public soon, while TPG prefers to test the market first to see if they can find a buyer willing to pay a good price, the people said.
Despite being more enthusiastic about pursuing an IPO, Warburg supports TPG's desire to seek outright buyers first, the people said Private-equity owners often pursue so-called dual-track processes to exit investments, exploring a sale and a public offering simultaneously.
Buyout firms often prefer to sell their companies outright, rather than pursue a public stock offering, in the hopes of fetching an attractive price that realizes their investment returns in one fell swoop.
While public offerings can also reap profits for private-equity owners, stock sales happen over time and the share price doesn't always cooperate with the sellers' timetable.
Bankers uninvolved said that because Neiman Marcus is considered a trophy asset with a wealthy customer base, it could command a premium even as the universe of potential buyers is slim. TPG and Warburg paid 12.5 times operating earnings when they acquired the company in 2005 for $5.1 billion.
Neiman's earnings steadily declined in subsequent years, as the recession hampered demand for luxury goods.
The company lost money in 2009 and 2010 and returned to profitability in 2011, according to filings for its publicly-traded debt. For the fiscal year ended July 2012, Neiman's operating earnings totaled $404 million, roughly flat with the $409 million earned in 2005.
foxbusiness.com
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