Why Sears’ Hometown & Outlet Stores Rejected Ex-CEO’s Offer to Buy Remaining Shares in Company
It wasn’t long after Sears Holdings Corp. chairman Eddie Lampert and his hedge fund, ESL Investments Inc., offered to buy the remaining 41 percent of the embattled Sears Hometown and Outlet Stores Inc. that his offer was rejected.
Lampert and ESL, which currently own a 59 percent stake in the company, submitted a proposal late Friday through an affiliate named Transform Holdco LLC to snap up Sears Hometown and Outlet Stores — which spun off from Sears Holdings in 2012 — for about $21 million, or $2.25 per share.
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However, on Monday, the board of the Sears spinoff announced that it had denied the request of Lampert, who previously made similar attempts with the embattled Sears and Kmart department store chains.
“Following the review of the proposal by the special committee and its advisers, the special committee concluded that a transaction on the terms contemplated by the proposal would not be in the best interests of the company’s unaffiliated stockholders and communicated that conclusion to representatives of Transform,” Sears Hometown and Outlet Stores wrote in a statement.
If the deal had been accepted, it would have seen Lampert take hold of both Sears and SHOS — both of which have had their share of struggles in recent years — potentially bringing them together as one entity.
In February, a bankruptcy judge approved the $5.2 million sale of Sears’ department chain to Lampert — four months after it filed for Chapter 11. Laid out in the billionaire’s restructuring plan was the goal of maintaining operations at 425 stores and saving the jobs of about 45,000 employees, as well as returning Sears to profitability. (The retailer hasn’t posted positive same-store sales results since 2010.)
SHOS was not part of the filing. According to its website, the company has more than 750 stores in 49 states across the country, operated by the company, its dealer owners and franchisees.
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