The future of department stores Sears has been hanging in the balance for quite some time since it filed for bankruptcy in October. But now, there may be some hope that the department store chain will be saved by Sears Chairman Eddie Lampert. Lampert has just announced a $4.6 billion bid to save the bankrupt retailer.
Sears Chairman Eddie Lampert’s ESL Investments Inc has made an offer valued at $4.6 billion to buy the bankrupt U.S. retailer, one of the only options that would prevent the department store chain from shutting its doors for good, according to Reuters.
The bid from Lampert’s ESL Investments includes about 500 Sears and Kmart stores, headquarters and distribution centres, and Sears brands and businesses including Kenmore, DieHard and Sears Home Services
“Sears is an iconic fixture in American retail, and we continue to believe in the company’s immense potential to evolve and operate profitably as a going concern with a new capitalization and organizational structure,” the letter read. “We believe that our strategy will enable Sears to prosper in an integrated consumer and retail landscape and view a going concern transaction as essential to providing optimal value to creditors and shareholders.”
In a regulatory filing addressed to Sears debtors’ investment banker, Lazard Frères & Co., Lampert shared plans to purchase the struggling company with an offer that includes up to $950 million in cash, a credit bid of about $1.8 billion and the assumption of an estimated $1.1 billion in liabilities. The acquisition, which would be completed through a newly formed entity called Newco, would consist of other funds such as the rollover of cash collateral as well as a combination of cash and notes.
“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,” Lampert’s hedge fund said in the letter sent to Sears’ investment banker Wednesday and filed Thursday with the U.S. Securities and Exchange Commission.
