Sears, Kmart may be bought for $5.2B
Hedge fund vows deal will save 45,000 jobs
Sears Holdings confirmed Thursday that the hedge fund owned by its chairman and largest investor has won the auction to purchase virtually all of the beleaguered company’s remaining assets.
Eddie Lampert’s ESL Investments will pay roughly $5.2 billion for a shrunken version of the iconic company, which owns both Sears and Kmart. Sears Holdings says that, if approved, the deal will save 45,000 jobs.
Shoppers who bought items with extended warranties will be able to have those agreements honored, ESL says, and some severance costs accrued during the company’s bankruptcy process will also be paid for as part of the pending deal.
“At every stage in this process, ESL has worked tirelessly to help Sears reemerge from bankruptcy, including by enhancing our offer several times, because we believe Sears has a future as a profitable company that can succeed in today’s competitive retail landscape,” the hedge fund said in a statement Thursday,
Lampert, who has given the company billions of dollars to keep it afloat amid flagging sales, stepped forward again last week with an offer that initially pledged to keep 425 stores open and 50,000 workers on the job.
ESL reportedly adjusted the bid this week to appease concerned creditors. But there’s a good chance some still will challenge ESL’s offer.
While innovations might be easier to execute with a smaller number of stores, a shrunken Sears still has an uphill battle dealing with the same forces that helped lead it to file for bankruptcy protection in October.
Its stores are often criticized for being shabby. Merchandise categories Sears once dominated are now available at more agile or attractive rivals like Best Buy, Walmart and Amazon.
The final hearing to green light the sale is scheduled for Feb. 1, and the deal is slated to close roughly seven days later.