Saks Fifth Avenue in Talks for $1 Billion Loan to Acquire Neiman Marcus

Apollo in talks to provide over $1 billion loan for Saks' bid to acquire Neiman Marcus, aiming to consolidate luxury retail.

By Max Weldon

4/3, 16:37 EDT
Apollo Global Management, Inc.

Key Takeaway

  • Apollo Global Management Inc. is discussing a loan of at least $1 billion to support Saks Fifth Avenue's acquisition of Neiman Marcus.
  • Saks aims to boost its bid for Neiman Marcus, leveraging its flagship store's $3.62 billion valuation.
  • Apollo, with $480 billion in assets, plans to increase debt origination by 50% by 2026, highlighting its major role in retail sector deals.

Financing the Acquisition

Apollo Global Management Inc. is currently in discussions to provide a substantial debt financing package to support the acquisition of Neiman Marcus by Saks Fifth Avenue. Sources familiar with the matter have indicated that Apollo is considering a loan of at least $1 billion to facilitate this deal. This financing effort may also involve other lending parties, though specifics have not been finalized, and the situation remains fluid with potential for changes.

Saks' Strategic Move

The move by Saks to acquire Neiman Marcus represents a significant consolidation effort within the luxury retail sector in the United States. Saks is reportedly seeking to enhance the cash component of their bid for Neiman Marcus, leveraging the high valuation of their flagship store located at 611 Fifth Ave. in Manhattan. This property, renowned for its annual holiday window displays that draw both locals and tourists, has recently been appraised at $3.62 billion, reflecting the strong demand for premium real estate in the area. This valuation could play a crucial role in securing the necessary financing for the acquisition.

Apollo's Role and Ambitions

Apollo Global Management Inc., known as the largest alternative credit manager, holds approximately $480 billion in alternative credit assets. The firm has been active in originating debt, with about $100 billion of debt originated last year alone. Apollo has set an ambitious target to increase this total by 50% by 2026. Their involvement in the potential Saks and Neiman Marcus deal underscores Apollo's significant role in facilitating major transactions within the retail and real estate sectors.