Sears share­hold­ers hire coun­sel

Two groups of big U.S. share­hold­ers in Sears Canada ex­plor­ing deal

The Guardian (Charlottetown) - - BUSINESS -

Two groups of ma­jor U.S. share­hold­ers in Sears Canada have hired le­gal coun­sel to ex­plore pos­si­ble deals with the strug­gling re­tailer as it un­der­goes a court-su­per­vised re­struc­tur­ing.

ESL Part­ners LP and en­ti­ties af­fil­i­ated with its prin­ci­pal share­holder, Ed­ward S. Lam­pert, an­nounced Mon­day that it is work­ing with Fairholme Cap­i­tal Man­age­ment on po­ten­tial pro­pos­als to make to Sears Canada.

ESL and Lam­pert cur­rently own 45.3 per cent of com­mon shares in Sears Canada and Fairholme owns about 20.8 per cent of Sears Canada’s shares as of early May — a to­tal of about two-thirds of the com­pany’s to­tal com­mon stock.

How­ever, un­der a court-su­per­vised re­struc­tur­ing, share­hold­ers are ranked lower than most cred­i­tors and ma­jor de­ci­sions must be ap­proved by the pre­sid­ing judge.

ESL and Fairholme, both based in Florida, say they are con­sid­er­ing a po­ten­tial ne­go­ti­ated trans­ac­tion with Sears Canada and its sub­sidiaries and may work to­gether or in­de­pen­dently to con­sid­er­ing fi­nanc­ing, pur­chase and sales or re­struc­tur­ing deals.

ESL says there’s no as­sur­ance it will pur­sue any pro­posal or that such a pro­posal would re­sult in a trans­ac­tion, or that Fairholme will par­tic­i­pate.

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