Eddie Lampert sweetens bid for bankrupt Sears to $5 billion

  • Eddie Lampert sweetens bid for bankrupt Sears to $5 billion

Eddie Lampert sweetens bid for bankrupt Sears to $5 billion

Sears Holdings Corp. chairman Eddie Lampert submitted a revised takeover bid of more than $5 billion for the company on Thursday, a regulatory filing showed, providing hope the 126-year-old USA department store chain could avoid liquidation.

Just over 500 Kmart and Sears stores remain open, but liquidation sales are already in the works at 80 of those stores, and Lampert's proposal involves running 425 stores.

According to Reuters, Lampert is expected to submit the revised offer, as well as a $120 million deposit, by 4 p.m. EST today (Jan. 9). The chain, which includes Kmart discount stores, had chose to ask a USA bankruptcy judge to pursue liquidation Tuesday morning, before giving Lampert more time to improve his offer.

The new bid, about US$600 million more than Lampert previously offered, should satisfy conditions set in USA bankruptcy court on Tuesday after his earlier plan was rejected, ESL said Thursday in a filing.

It's likely to be an anxious weekend for as many as 68,000 Sears and Kmart employees as their jobs continue to hang in the balance.

A bankruptcy auction for the assets of Sears Holdings is scheduled for January 14, where Lampert's bid, if accepted, will compete with bids from liquidators.

"As we have said before, our proposal provides substantially more value to stakeholders than would be the case in liquidation and is the only option to save an iconic American retailer and up to 50,000 jobs", the statement reads.

A group of Sears creditors, including some landlords and vendors, has been calling for the chain to shut its doors for good, saying they will recover more money in that scenario. The company also has $1.1 billion in liabilities.

If his new bid passes muster with creditors and the court, Lampert can compete in the auction against bidders who would liquidate the company. For that right, a so-called "legal release", Lampert is offering $35 million cash, according to the filing.

To finance the new offer, ESL has received debt commitment letters from certain lenders related to a new asset-backed loan facility and from funds managed by Cyrus Capital Partners to roll over certain debt facilities and for a new secured real estate loan, the filing showed.

ESL will pay as much as US$135 million of property taxes for locations acquired in the bid, it said in the filing.