Deadline near for Sears on chairman’s $4.4B asset offer

CHICAGO — By the end of the week, Sears Chairman Edward Lampert is to find out whether his push to keep the bankrupt retailer together and open for business still has a shot.

Lampert’s hedge fund, ESL Investments, said Friday that it’s prepared to pay $4.4 billion for many of the retailer’s remaining assets, including about 425 Sears and Kmart stores. Friday was the deadline for parties interested in acquiring Sears’ assets to submit bids.

Transform Holdco, a new entity controlled by Lampert’s fund, said in a letter to Sears’ investment banker that it believes keeping the Hoffman Estates, Ill.-based company in business is the best way to preserve up to 50,000 jobs and recover money the retailer owes. The letter, dated Friday, was released Wednesday in a regulatory filing.

Transform Holdco said that if Sears doesn’t accept the $4.4 billion bid packaging many of the remaining assets together, it also would bid on certain assets individually, including the Sears Home Services business, certain intellectual property and real estate, and the logistics operation.

Sears has until this Friday to notify parties that submitted offers to purchase its assets whether they have been accepted as qualifying bids, according to a timeline approved by the U.S. Bankruptcy Court for the Southern District of New York.

Transform Holdco said that if Sears doesn’t accept either proposal as a qualifying bid by Friday, both will be withdrawn.

It’s unclear how many other offers Sears received or

● whether any would attempt to rescue Sears rather than liquidating it.

Great American Group submitted a bid with Tiger Capital Group but declined to share details of the offer. A subsidiary of B. Riley Financial, Great American Group partnered with Tiger Capital Group last year to buy many of bankrupt retailer Bon-Ton Stores’ assets and liquidate the company. Another firm

has since purchased BonTon’s intellectual property and is working to revive its brands, including Carson’s.

ESL’s $4.4 billion offer for Sears includes $850 million in cash, funded by a new $1.3 billion loan from three financial institutions. It also includes a $1.3 billion credit bid, in which ESL would trade Sears debt it holds for ownership in the new company.

Transform Holdco said it wants Sears to confirm it will be able to use the credit bid to finance the purchase. The company also wants Sears to

release ESL from liability related to transactions with the retailer before its bankruptcy filing.

In the letter, Transform Holdco said it expects to continue employing up to 50,000 Sears employees under the $4.4 billion proposal, “depending on any further actions Sears may take between now and closing.”

Sears said it employed 68,000 employees and had 687 Sears and Kmart stores when it filed for Chapter 11 in October. Last week, Sears said it would close 80 stores

in March, bringing the total number of closures announced since its bankruptcy filing to 262.