Sears reportedly seeks to liquidate after rejecting investor's last-ditch takeover bid

Marcus Newton
January 9, 2019

New York-It's looking like 126-year-old Sears Holdings Corp. will soon head to liquidation. The bid would have kept 425 stores open and offered jobs to 50,000 of its remaining employees.

US Bankruptcy Judge Robert Drain in the Southern District of NY, who is presiding over the case, could decide to give Lampert more time to improve his bid, the Reuters sources said, adding that a bankruptcy auction for Sears' assets is not due until January 14.

After two long delays at a morning hearing in bankruptcy court, attorneys for Sears announced it had accepted a revised bid from a hedge fund controlled by Eddie Lampert, the chairman and former CEO of Sears.

But at a NY bankruptcy court, Sears' lawyers told a judge that the company was prepared to consider a revised offer from Sears' chairman Eddie Lampert's ESL hedge fund.

Lampert entered the bid through Transform Holdco LLC, an affiliate of his private equity firm, ESL Investments Inc.

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Mr Lampert's hedge fund originally submitted a last-minute bid for Sears valued at $4.4bn (£3.5bn) ahead of the December 28 deadline, to stop the retailer from being liquidated.

The chairman and CEO of Berkshire Hathaway warned 13 years ago, during a conversation he had in 2005 with students from the University of Kansas, that Sears Chairman Eddie Lampert's venture in merging Sears and Kmart was unlikely to succeed, as first reported by Business Insider.

Drain said that Sears will consider Lampert's offer versus a potential liquidation during a bankruptcy auction on January 14. Sears filed for bankruptcy in October. It is known he expects the new Sears to borrow $1.3 billion from three leading banks. Even as Sears' brick and mortar competitors established effective e-commerce operations Sears - a pioneer in catalog sales - failed to do so.

Sears was down almost 94% in the past year. It is still possible that those wishing to shutdown the company will bid more for the assets than Lampert is offering. The company responded by closing unprofitable stores.

Other reports by MaliBehiribAe

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