UPDATE 4-Neiman Marcus sold for $6 bln to Canada Pension Plan, Ares

Mon Sep 9, 2013 4:06pm EDT
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By Andrea Hopkins and Phil Wahba

NEW YORK/TORONTO, Sept 9 (Reuters) - The owners of Neiman Marcus Inc agreed to sell the U.S. luxury department store chain to two private investors for $6 billion, almost $1 billion more than they paid for the company in 2005.

The buyers, Ares Management LLC and the Canada Pension Plan Investment Board (CPPIB), said on Monday they will split ownership equally, with an undisclosed minority stake going to current management.

The deal keeps the company in private hands after a long search for a buyer by current ownership, led by private equity firms TPG Capital LP and Warburg Pincus LLC. They had also explored a possible IPO for Neiman, which they took private in 2005 for $5.1 billion.

The Dallas-based retailer operates 41 namesake department stores along with the famed Bergdorf Goodman store on Manhattan's Fifth Avenue and the Last Call outlet chain.

The deal suggests that some investors see a possible revival in the luxury retail segment. In July, Hudson Bay Co bought Saks Fifth Avenue, another storied U.S. retailer.

The parties said they expected the deal to close in the fourth quarter.

"If you look at where we are in the cycle, it's a good time to buy this business," said Andre Bourbonnais, senior vice president of private investments at CPPIB, one of Canada's largest public pension funds and a global dealmaker whose assets including shopping malls, real estate and infrastructure.   Continued...