Jeweller Blue Nile goes private in $500 million deal

The online jeweller Blue Nile Inc (NASDAQ:NILE) has agreed to be taken private by an investor group that includes Bain Capital Private Equity and Bow Street LLC for about $500 million in cash.

Founded in 1999, Blue Nile is an online diamond retailer known for engagement rings. The company, which operates its website in more than 40 countries, also sells diamond wedding bands and provides custom jewellery design services.

Blue Nile stockholders will receive $40.75 in cash per share, representing a premium of approximately 34 percent over Blue Nile’s closing price on November 4, 2016

“Since its inception, Blue Nile’s guiding principle has been to provide value to its customers, suppliers, and shareholders, and this transaction provides tremendous value to all,” said Blue Nile Chairman, CEO and President Harvey Kanter in a statement. “Blue Nile will continue its innovative drive that has disrupted the diamond industry and made us the smartest, easiest, and most pressure-free way for consumers to buy a diamond.”

“This is an opportunity to acquire a true disruptor in a fundamentally attractive and growing segment of the diamond industry,” said Ryan Cotton, a Managing Director at Bain Capital Private Equity. “Blue Nile provides a clearly superior consumer value proposition and offers a convenient delivery model that enables choice and selection in a no-pressure environment. We believe the company will continue to grow as educated consumers continue to seek easy and convenient shopping experiences that deliver transparent pricing and enhanced value.”

Blue Nile has a 30-day “go-shop” period, where it can implore alternate proposals, the company said.

The $40.75 per share offer represents a nearly 34 percent premium over Blue Nile’s closing price on Friday.

Blue Nile’s shares, which have lost 16 percent of their value so far this year, were up to 31.5 percent at $40.04 in premarket trading on Monday. The deal is expected to close in the first quarter of 2017.