Eddie Lampert files $4.6B Sears takeover bid via ESL
Sears Holdings Chairman (and former Sears CEO) Eddie Lampert made a $4.6 billion bid through his hedge fund, ESL Investments, for Sears, its real estate and brands like Kenmore and its Sears Auto Services, according to an SEC regulatory filing published Thursday.
Under the terms of the deal, Lampert aims to prevent the liquidation of its remaining roughly 500 Sears and Kmart stores, therefore continuing to employ about 50,000 workers. The bid includes up to $950 million in cash to be funded with the proceeds of a new asset-based credit facility to be obtained by Newco, a $1.8 billion credit bid and $1.1 billion in assumed liabilities with respect to certain protection agreements, gift cards and accrued points under the Shop Your Way loyalty program.
The bid, which would have to be approved by creditors, will compete with bids from liquidators too. The company reportedly has been entertaining bids from "a number of" liquidators interested in closing all stores, The Wall Street Journal reported last week. Bids are due at the end of the month and an auction is expected to take place mid-January.
The ultimate fate of the iconic retailer, its stores and their employees has been in limbo since Sears filed its long-anticipated bankruptcy in October. In the time since Sears won court approval to sell 400 of its best-performing stores as well as approval to shutter at least 182 unprofitable stores.
While Lampert is no longer the CEO of Sears, through his own holdings and that of his hedge fund, he is Sears' largest shareholder and one of its largest lenders. Over the last decade, he has spun a complex web of involvement that connects to nearly every aspect of the company's finances. And still, he appears unwilling to walk away.
Approval of Lampert's bid is uncertain, given the contentious clash that's been playing out in court between Lampert and Sears' unsecured creditors who have questioned whether Sears has a viable future as an operating retailer. Mid-November, attorneys of the creditors filed an objection to Sears' plan to sell remaining stores while also describing the retailer's go-forward business plan as "nothing more than wishful thinking."
- SEC SEC filing
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