MAR­KETS Sears chair­man Lam­pert bids for bank­rupt re­tailer

Viet Nam News - - FRONT PAGE -

NEW YORK — Sears Hold­ings Corp Chair­man Ed­die Lam­pert’s ESL In­vest­ments Inc has made an of­fer val­ued at US$4.6 bil­lion to buy the bank­rupt US re­tailer, one of the only op­tions that would pre­vent the depart­ment store chain from shut­ting its doors for good.

Lam­pert’s of­fer calls for about 500 Sears stores to re­main open and would keep 50,000 of the re­tailer’s work­ers em­ployed, ac­cord­ing to a let­ter from his hedge fund filed with the Se­cu­ri­ties and Ex­change Com­mis­sion on Thurs­day.

The 125- year- old com­pany faces a se­ries of dead­lines this month to find a buyer that would keep it in busi­ness as some of its cred­i­tors call for it to shut down, claim­ing they would be re­paid more through go­ing-out-of-busi­ness sales.

Pre­lim­i­nary in­di­ca­tions of in­ter­est for Sears as­sets were due Wed­nes­day, ac­cord­ing to court pa­pers.

Many re­tail­ers that have filed for bank­ruptcy in re­cent years, in­clud­ing toy seller Toys R Us Inc and depart­ment store Bon-Ton Stores Inc, have liq­ui­dated af­ter no vi­able of­fers to keep the com­pa­nies open were made.

ESL’s takeover bid fea­tures fi­nanc­ing from a va­ri­ety of sources and a com­pli­cated struc­ture not un­com­mon in bank­ruptcy auc- tions. For starters, the hedge fund pro­poses to raise up to $1.7 bil­lion in cash through a se­ries of ma­noeu­vres that in­clude Sears seek­ing a new loan backed by col­lat­eral and is­su­ing new notes.

The hedge fund, the re­tailer’s largest share­holder and cred­i­tor, would also forgive $1.8 bil­lion Sears owes it in ex­change for the com­pany’s as­sets, a bank­ruptcy ma­noeu­vre known as credit bid­ding. Fi­nally, ESL would as­sume $1.1 bil­lion in ex­ist­ing Sears li­a­bil­i­ties, such as gift cards the depart­ment-store chain is­sued.

Lam­pert’s hedge fund has been work­ing on a bid for Sears since the com­pany filed for bank­ruptcy in Oc­to­ber. The hedge fund man­ager was the chief ex­ec­u­tive of Sears un­til it filed for bank- ruptcy.

In his bid, ESL also pro­poses to ac­quire Sears Auto Cen­ters, ap­pli­ance brand Ken­more, bat­tery line DieHard and the re­tailer’s home ser­vices divi­sion, the largest US ap­pli­ance re­pair provider, the let­ter said.

The re­tailer is at­tract­ing in­ter­est from out­siders, and Sears’ at­tor­neys have said they will an­a­lyse bids to max­imise value. Re­tailer Ace Hard­ware Corp and in­vest­ment firm Cen­ter­bridge Partners LP were to­gether eyeing an of­fer for Sears’ home ser­vices divi­sion, Reuters re­ported this week.

Firms that spe­cialise in goin­gout-of-busi­ness sales, so-called liq­uida­tors, were also ex­pected to make pre­lim­i­nary of­fers to shut Sears down, ac­cord­ing to sources fa­mil­iar with the mat­ter.

Sears clinched a $350 mil­lion loan from cred­i­tor Cyrus Cap­i­tal Partners LP in Novem­ber to help it stay in busi­ness through the hol­i­days. — REUTERS

Newspapers in English

Newspapers from Viet Nam

© PressReader. All rights reserved.