Sears CEO offers to buy Kenmore, other assets
ESL Investments, the hedge fund run by Sears Holdings Corp. chairman and CEO Eddie Lampert, has thrown another lifeline to the struggling department store retailer to help raise cash.
ESL sent a letter to the retailer in which it said it is willing to make a proposal to buy the Kenmore appliance brand, Sears' home improvement business and parts direct division, and some of the chain's real estate. The offer comes after Sears has been unable to find a buyer for the assets.
The letter, signed by Lampert, noted that Kenmore and the other assets in question have “substantial value” and that divesting one or more of them would enable Sears to improve its debt profile and liquidity position. ESL described Kenmore as an "iconic brand" and said it would be prepared to close a deal for the brand within 90 days.
The hedge fund valued Sears’ home improvement and parts direct businesses at a combined $500 million and said it would pay for them in cash.
ESL also said it would "be open to making an offer" for Sears' real estate (including the assumption of $1.2 billion in debt obligations), with an expectation that Sears would continue operating its stores, leasing back from ESL.
"We continue to see value in Sears and its underlying assets and believe strongly that with an appropriate runway Sears will be able to complete its transformation to respond to the challenging retail environment,” ESL said in the letter. “We also are of the view that the portfolio of Sears' assets has substantial value that is not being reflected in the capital markets or being maximized under the current organizational structure.”
Sears said the letter from ESL will be “reviewed and considered” by an independent board of directors. Sears and ESL said that Lampert would not take part in any discussions, negotiations or decisions "except to the extent specifically requested by that committee."
To read the full letter, click here.
ESL sent a letter to the retailer in which it said it is willing to make a proposal to buy the Kenmore appliance brand, Sears' home improvement business and parts direct division, and some of the chain's real estate. The offer comes after Sears has been unable to find a buyer for the assets.
The letter, signed by Lampert, noted that Kenmore and the other assets in question have “substantial value” and that divesting one or more of them would enable Sears to improve its debt profile and liquidity position. ESL described Kenmore as an "iconic brand" and said it would be prepared to close a deal for the brand within 90 days.
The hedge fund valued Sears’ home improvement and parts direct businesses at a combined $500 million and said it would pay for them in cash.
ESL also said it would "be open to making an offer" for Sears' real estate (including the assumption of $1.2 billion in debt obligations), with an expectation that Sears would continue operating its stores, leasing back from ESL.
"We continue to see value in Sears and its underlying assets and believe strongly that with an appropriate runway Sears will be able to complete its transformation to respond to the challenging retail environment,” ESL said in the letter. “We also are of the view that the portfolio of Sears' assets has substantial value that is not being reflected in the capital markets or being maximized under the current organizational structure.”
Sears said the letter from ESL will be “reviewed and considered” by an independent board of directors. Sears and ESL said that Lampert would not take part in any discussions, negotiations or decisions "except to the extent specifically requested by that committee."
To read the full letter, click here.