After weeks of uncertainty about its future, Sears Holdings Corp. has been rescued by the struggling retailer’s own chairman and former CEO.
Eddie Lampert won a bankruptcy auction to keep the beleaguered department store chain alive, increasing his takeover bid to about $5.2 billion, according to a Reuters report that cited people familiar with the matter.
The billionaire executive’s proposal was up from an already revised $5 billion offer made through his hedge fund, ESL Investments Inc. (His initial bid of $4.4 billion failed to meet requirements and was considered “administratively insolvent.”)
Lampert remains Sears’ largest investor, with ESL loaning the company more than $2.4 billion in financing over the last several years. The latest bid would prevent the 126-year-old business from liquidating its assets, reportedly saving up to 45,000 jobs and maintaining operations at 425 stores across the United States.
Held at the Manhattan offices of the company’s bankruptcy counsel, Weil, Gotshal & Manges LLP, the auction wrapped up early Wednesday. Through veteran liquidation firm Abacus Advisory Group LLC, Sears was reported to be the only challenger to Lampert, whose offer still requires approval by a U.S. bankruptcy judge. The hearing to approve the sale has been scheduled for Feb. 1.
“We are pleased to have reached a deal that would provide a path for Sears to emerge from the Chapter 11 process,” the restructuring committee of the board of directors wrote in a statement. “Importantly, the consummation of the transaction would preserve employment for tens of thousands of associates as well as the relationships with many vendors and suppliers who provide Sears with goods and services.”
Once a dominant force in retail, Sears filed for Chapter 11 bankruptcy protection on Oct. 15. It joined a number of high-profile victims, including Toys R Us and Bon-Ton, at a time when brick-and-mortar mainstays continue to shrink their physical footprints and invest more resources in e-commerce.
This story was updated to reflect the statement from the board of directors’ restructuring committee as well as the hearing date to approve the sale. The original story was published on Jan. 16.
Sears Chairman Reportedly Ups Bid to $5 Billion to Save Bankrupt Retailer
Sears Accepts Last-Minute Revised Bid From Chairman to Avoid Liquidation
Despite Sears and Kmart Closures, Retail Vacancies Held Steady in Q4