Sears has been saved at the eleventh hour.
The bankrupt retailer narrowly evaded liquidation after a hedge fund led by Sears chairman Eddie Lampert submitted a last-minute bid valued at $4.4 billion ahead of the 4 p.m. ET buyout deadline on Friday.
An affiliate of Lampert’s ESL Investments Inc., Transform Holdco LLC said in a statement that it intended to maintain operations at 425 stores as well as keep 50,000 (of the company’s 68,000) jobs and reinstate the severance program for eligible employees. The proposal also included $1.3 billion in financing from three institutions.
The bid still requires approval from the board, with a court date scheduled in mid-January. Sears’ advisers have until Jan. 4 to determine whether the hedge fund is a “qualified bidder,” and then ESL would be able to participate in an auction against liquidation bids on Jan. 14.
Once a dominant force in retail, Sears Holdings Corp. filed for bankruptcy on Oct. 15. Over the last several years, ESL has loaned the company more than $2.4 billion in financing, with Lampert remaining Sears’ largest investor. The hedge fund is also the only party that has publicly offered to buy Sears Holdings Corp. as a whole, which would prevent it from being broken up into pieces by liquidators.
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Also on Friday, the beleaguered department store chain announced that it would shutter another 80 of its Sears and Kmart locations across the country in late March. Liquidation sales at the stores are expected to begin in two weeks.
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