Lampert’s ESL offering to buy Kenmore brand
Sears Holdings has received a letter from ESL Investments proposing that the struggling retailer divest its Kenmore appliance brand, along with Sears Home Services and its PartsDirect business.
ESL, the hedge fund owned by Sears Holdings chairman and CEO Eddie Lampert, would then buy the businesses from Sears for about $500 million. Lampert is Sears Holdings’ largest shareholder with more than 30% ownership.
The letter states that, “Kenmore, SHIP, and PartsDirect have substantial value and that divesting one or more of them would enable the Company to improve its debt profile and liquidity position.”
Last year the retailer sold its Craftsman tool brand to Stanley Black & Decker for nearly $900 million and has since begun selling the Kenmore brand via Amazon.
ELS is also offering to purchase Sears’ real estate, along with $1.2 billion in debt. Sears would then lease the stores and continue to operate its brick-and-mortar operation. The Hoffman Estates-based retailer has been looking to sell the assets for about two years while closing hundreds of stores.
“We understand that Sears has marketed certain of these assets for nearly two years but, with the exception of the Craftsman divestiture, has been unable to reach agreement with potential purchasers on acceptable terms,” Lampert wrote in a letter Sears Holding’s board of directors.
Lampert and ESL President Kunal Kamlani would not participate on behalf of the company in any talks or decisions for any potential transaction involving ESL as a buyer, according to the letter.
ESL, the hedge fund owned by Sears Holdings chairman and CEO Eddie Lampert, would then buy the businesses from Sears for about $500 million. Lampert is Sears Holdings’ largest shareholder with more than 30% ownership.
The letter states that, “Kenmore, SHIP, and PartsDirect have substantial value and that divesting one or more of them would enable the Company to improve its debt profile and liquidity position.”
Last year the retailer sold its Craftsman tool brand to Stanley Black & Decker for nearly $900 million and has since begun selling the Kenmore brand via Amazon.
ELS is also offering to purchase Sears’ real estate, along with $1.2 billion in debt. Sears would then lease the stores and continue to operate its brick-and-mortar operation. The Hoffman Estates-based retailer has been looking to sell the assets for about two years while closing hundreds of stores.
“We understand that Sears has marketed certain of these assets for nearly two years but, with the exception of the Craftsman divestiture, has been unable to reach agreement with potential purchasers on acceptable terms,” Lampert wrote in a letter Sears Holding’s board of directors.
Lampert and ESL President Kunal Kamlani would not participate on behalf of the company in any talks or decisions for any potential transaction involving ESL as a buyer, according to the letter.