The deadline to buy Sears out of bankruptcy is today; so far no one is bidding
Subscribe for unlimited digital access.
Try one month for $1!
Subscribe for unlimited digital access. Try one month for $1!
Sears chairman Eddie Lampert put together bid on Friday to buy the owner of Kmart and Sears, in a last-ditch effort to rescue the bankrupt retailers from going out of business, USA Today reports.
Transform Holdco LLC submitted a bid for substantially all of the assets of Sears Holdings, including 425 stores, which it says is valued at $4.4 billion. The bid includes a $1.3 billion financing commitment from three financial institutions, according to an emailed statement. Transform said that if the bid is successful the company that emerges from bankruptcy would employ up to 50,000 people.
All bids to buy the company out of bankruptcy were due Friday at 4 p.m. ET. A bid doesn’t guarantee that Sears would be saved. The company and its advisers must determine by Jan. 4 whether the bid is “qualified.”
The last-minute bid came a day after the Hoffman Estates company informed employees it would close another 80 Sears and Kmart stores across the country by March, including two in Illinois.
Lampert had previously put forward a $4.6 billion proposal — not an official bid — to buy the company out of bankruptcy through his hedge fund, ESL Investments, on Dec. 6. The deal included 500 stores, 50,000 employees, the Kenmore appliance and DieHard tool brands, key real estate and the company’s inventory and receivables.
The bid put forth Friday evening came from Transform Holdco LLC, a hedge fund run by Lampert that is an affiliate of ESL Investments.
The company still could be forced to liquidate some assets. Last week, for example, U.S. Bankruptcy Court Judge Robert Drain allowed the beleaguered retailer to sell its home-improvement service business to Service.com for $60 million.
Sears has suffered for years, as U.S. consumers increasingly turned their backs on brick-and-mortar stores. But the Hoffman Estates-based retail giant, a mainstay of American malls for decades, failed to ride the online-shopping trend.
On Oct. 15, Sears Holdings filed for Chapter 11 bankruptcy protection, a last-ditch attempt to avoid folding after years of store closures, sales declines and borrowing. At the time of the filing, Sears had just under 700 stores and planned to shut down 142 unprofitable stores. In November, it announced it was closing another 40 stores.
Lampert entered the picture in 2005. The hedge-fund investor pushed Kmart, which he’d bought out of bankruptcy two years earlier, to acquire Sears for $11 billion and then merged the two.
He later resigned as CEO but remains chairman, while propping up the company for years with round after round of debt financing. Lampert has faced criticism for lacking a clear-cut turnaround strategy.
• Sears’ biggest holder bids $4.6B for rest of bankrupt chain
• Sears hopes 505 of its stores, 11 in Illinois, will stay open under new owner
• Girdles and socket wrenches: Sears was the Amazon of its day