Most companies in the world are privately owned and when they decide to raise funds on the stock market they become partly owned by the public. While it often is easier to raise capital for the business when it is public, it does come at the expense of both regulations and the public has a right to know.

In an article from the Associated Press, the department store Nordstrom has decided to try to buy back all the shares outstanding to go private. Nordstrom family members own 33.4% of the company’s outstanding shares and are willing to pay investors $23.

The Nordstrom family has partnered with the Mexican retail group El Puerto de Liverpool, which operates over 300 stores in Mexico and is the 3rd largest credit card issuer with over 7.2 million active accounts. The Mexican group owns 9.6% of the stock.

Nordstrom which is headquartered in Seattle, Washington is run by CEO Erik B. And President Peter E. Nordstrom who are the 4th generation to run the company. It was founded in 1901 as a shoe store.

During the past generations, department stores would have commanded a high premium, however the offer is pretty much the current value of the stock, said Neil Saunders managing director GlobalData.

Nordstrom reported sales growth of 3-4% in the 2nd quarter. The company operates both the upscale Nordstrom and the discount Nordstrom Rack stores. Sales at Nordstrom Rack rose 8.8%.

To buy out the shares, Nordstrom has commitments for $250 million in new bank financing.

Linking to dividend paying stocks, just because a company is public there are no guarantees it will stay there and companies go back and forth on a regular basis. Often times when sales are down, a new owner or hedge fund comes in, takes the company private and makes cuts to bring the company back to profitability and then becomes public again with a windfall for its new owners. If companies are profitable, there is less chance they will go private because the premium has to be very large to entice the shareholders to seek alternatives, but it happens.

There are more questions than answers, till the next time – to raising questions.