Sears' biggest holder bids $4.6 billion to salvage bankrupt chain

Sears' biggest holder bids $4.6 billion to salvage bankrupt chain

Sears' biggest holder bids $4.6 billion to salvage bankrupt chain

The Sears Holdings chairman offered to buy back the bankrupt retailer via his ESL Investments fund for $4.6 billion, a price tag that includes saving 500 Sears stores, the company's headquarters in Hoffman Estates, Ill., and its Kenmore and DieHard brands.

Lampert in 2002 bought Kmart debt as the discount retailer entered Chapter 11 bankruptcy protection, and at the same time bought Sears shares, paving the way towards a merger. It then said it would shutter 142 unprofitable stores in the hopes that it could stay in business.

While current Sears shareholders have lost almost all their investment, tens of thousands of workers have lost their jobs and creditors that include the USA government are owed $11 billion, Lampert has made almost $1.5 billion to date from his Sears investment, Institutional Investor calculated in a story published this week. That location, at 1502 S. Fourth St., is slated to close by year-end. Lampert stepped down as Sears CEO following the October 15 bankruptcy filing. Prior to that, the company had closed or announced plans to close hundreds of stores.

The bid presented on Thursday could include a combination of cash, equity new loans, and debt swaps, according to the documents. He is also Sears' largest investor.

In the letter, ESL said it believes long-struggling Sears can successfully reorganize around the smaller group of stores.

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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.

Smith, former Obama economic adviser Robert Wolf, FBN's David Asman and Dagen McDowell on Sears filing for bankruptcy protection. The more recent budget came after Sears said it planned to sell 505 stores that would continue in business, about 100 more than initially planned, which may have affected revenue forecasts. Both Sears and the creditors committee are looking into transactions between ESL and the retailer, including loans the hedge fund said amount to $2.4 billion over the past several years.

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

ESL's takeover bid features financing from a variety of sources and a complicated structure not uncommon in bankruptcy auctions.

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