Lampert’s revised bid for Sears tops $5 billion
Edward Lampert, the billionaire who led Sears Holdings into bankruptcy, has increased his offer to more than $5 billion, in a last-ditch effort to keep the ailing retailer alive.
Lampert’s hedge fund, ESL Investments, Thursday unveiled the details of his new “going concern” bid, which includes a $600 million increase over an earlier offer, in a regulatory filing. Much of the additional $600 million is earmarked for the retailer’s vendors and to pay property taxes.
Sears, which filed for chapter 11 protection in October, plans to hold a court-supervised auction on Monday that will determine whether what is left of the 126-year-old chain is liquidated or left in Lampert’s control. The retailer’s creditors want to wind down the business, but the hedge fund manager-turned-CEO wants to keep more than 400 stores open.
Lawyers for the committee representing unsecured creditors couldn’t be reached for comment Thursday.
While the revised bid may have more money for Sears, it also has more for Lampert.
The new offer would include the purchase of 57 additional real estate properties in addition to the Sears stores that were included in his original bid.
In addition to more real estate, Lampert wants his new offer to include more than $300 million in uncollected accounts receivable as part of the deal, as well as more than $300 million in inventory, including some that has already been paid for. Under his earlier bid, Sears would have been able to collect those accounts, sell the real estate and deal with the inventory.
It will be up to Sears’s board to decide what Lampert’s bid is worth and how it stacks up against the rival offer from a liquidator.
A key sticking point with ESL’s offer is how much money it leaves for unsecured creditors, including Sears’ suppliers, landlords and others.
ESL’s new bid would award $35 million to unsecured creditors in exchange for a so-called release from future litigation over transactions the hedge fund carried in the past.
A portion of ESL’s bid includes a so-called credit bid that forgives about $1.3 billion in loans the hedge fund made to Sears over the years.
Shoppers leave the Sears department store at the Chapel Hills Mall on Dec. 28.