Sears Holdings Corp chairman Eddie Lampert on Wednesday submitted a revised roughly US$5 billion takeover bid for the company, people familiar with the matter said, boosting the chances that the US department store operator would escape liquidation.
In a concession, Lampert agreed to assume tax and vendor bills that Sears has incurred since filing for bankruptcy protection in October last year, the sources said.
The billionaire’s revised bid was submitted through an affiliate of his hedge fund, ESL Investments Inc, on Wednesday afternoon along with a US$120 million deposit, the sources said.
Photo: EPA-EFE
Lampert’s previous bid, which Sears had rejected, was valued at US$4.4 billion.
The new bid, which Sears is to consider at a bankruptcy auction on Monday next week, proposes assuming roughly US$300 million of tax and merchandise expenses that the 126-year-old company has racked up since its bankruptcy filing on Oct. 15 last year, the sources said.
It would also preserve up to 50,000 jobs, they said.
Sears employed about 68,000 people when it filed for bankruptcy.
Ensuring Sears can pay its expenses, which include bills for legal and financial advisers, and are known as administrative claims, was a main point of contention as the company negotiated the deal with Lampert.
Lampert’s previous bid had proposed acquiring 425 Sears stores.
Sears and ESL declined to comment.
Lampert’s revised bid is the only one that envisions keeping Sears alive, albeit in a smaller form, and came after a last-minute deal he reached with the retailer on Tuesday as the company was preparing to liquidate. Other offers submitted over the past several weeks were for pieces of Sears or liquidation proposals to close its doors.
Sears will now weigh Lampert’s offer against a liquidation that would shut down the retail chain for good and put tens of thousands of people out of work. Sears has lined up a liquidator to sell off the chain’s vast inventories of tools, appliances and store fixtures if necessary.
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