Sears’ big­gest holder bids $4.6B for rest of bank­rupt chain

The Trentonian (Trenton, NJ) - - BUSINESS - By Anne D’in­no­cen­zio

NEW YORK >> Ed­die Lam­pert and his ESL Hold­ings hedge fund are of­fer­ing to buy the rest of Sears for up to $4.6 bil­lion in cash and stock in a move to stave off liq­ui­da­tion.

The Sears chair­man and ESL founder own just un­der half of the Hoff­man Es­tates, Illi­nois, com­pany, ac­cord­ing to Fac­tSet. Sears filed for Chap­ter 11 bankruptcy pro­tec­tion in Oc­to­ber, weighed down by years of de­clin­ing sales and mas­sive debt. It then said it would shut­ter 142 un­prof­itable stores in the hopes that it could stay in busi­ness.

ESL Hold­ings said in a reg­u­la­tory fil­ing Thurs­day that its non­bind­ing of­fer for the roughly 500 re­main­ing Sears stores will keep about 50,000 em­ploy­ees work­ing. The of­fer is sub­ject to due dili­gence and ESL’s abil­ity to get fi­nanc­ing, among other things.

“ESL be­lieves that a fu­ture for Sears as a go­ing con­cern is the only way to pre­serve tens of thou­sands of jobs and bring con­tin­ued eco­nomic ben­e­fits to the many com­mu­ni­ties across the United States that are touched by Sears and Kmart stores,” the firm said in a pre­pared state­ment. The pace of the de­te­ri­o­ra­tion has been rapid.

As re­cently as 2012 the com­pany op­er­ated 4,000 Sears and Kmart stores. In­clud­ing the clos­ings af­ter the bankruptcy fil­ing, Sears would have just over 500 func­tion­ing lo­ca­tions left.

As of the bankruptcy fil­ing, the com­pany em­ployed about 68,000 peo­ple.

The ESL bid fol­lows a se­ries of moves that Lam­pert has of­fered to sal­vage the com­pany over the past few years. And it comes as it’s lack­ing sup­port from many ven­dors who have been re­luc­tant to work with Sears as they fear they won’t get paid.

“I think he has a plan whether it will be ev­i­dent or not to us,” said David Tawil, pres­i­dent and co-founder of Maglan Cap­i­tal, which fol­lows dis­tressed com­pa­nies. “Whether that plan will be suc­cess­ful, I don’t know.”

Robin Lewis, a New York­based re­tail con­sul­tant, ques­tioned whether Lam­pert is hon­estly try­ing to save the busi­ness and bring it out of busi­ness.

“If he is suc­cess­ful in do­ing so, the first per­son he should fire is him­self,” said Lewis. “He will con­tinue to de­stroy it and it will be right where it was.”

SETH WENIG — THE AS­SO­CI­ATED PRESS

Ed­die Lam­pert and his ESL Hold­ings hedge fund are of­fer­ing to buy the rest of Sears for up to $4.6 bil­lion in cash and stock. The Sears chair­man and ESL own just un­der half of the Hoff­man Es­tates, Illi­nois, com­pany, ac­cord­ing to Fac­tSet. Sears filed for Chap­ter 11 bankruptcy pro­tec­tion in Oc­to­ber, weighed down by years of de­clin­ing sales and mas­sive debt.

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