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Sears largest shareholder won a bid to acquire Sears in a bankruptcy auction by spending more than $5 billion to avert the liquidation of the company and keep Sears and Kmart stores open.
Sears Holdings, which also owns Kmart, accepted a $5.2 billion takeover bid at a bankruptcy option from Eddie Lampert, the largest shareholder and chairman of Sears.
Lampert, a 56-year-old billionaire, made the bid through a hedge fund he runs called ESL Investments. Lampert had been trying to acquire Sears Holdings for quite some time.
With the takeover by Lampert, it is estimated that the approximately 425 Sears and Kmart stores in the US will remain open. Additionally, 45,000 company employees will be able to keep their jobs.
Last October, Sears Holdings had filed for bankruptcy and it was expected that the company would close down entirely, and begin shuttering and liquidating all of its Sears and Kmart stores in early 2019
At the time of the bankruptcy filing, Sears and Kmart, combined, had roughly 700 stores in operation. Five years prior, that number was 2,000. By the time Lampert made his bid, the number of stores had dropped to only about 425.
With the takeover move by Lampert, the matter now moves to a bankruptcy judge for review. The review is expected to happen sometime this week or early next week.
No matter who the owner of the company is, skepticism remains as to the prospects of Sears and Kmart stores surviving amid competition from giants such as Amazon, Walmart, Best Buy and Home Depot.
Lampert believes he has a strategic plan to turn Sears into a profitable business.
In a statement sent in December, Lampert wrote:
“Sears is an iconic fixture in American retail and we continue to believe in the company’s immense potential to evolve and operate profitably as a going concern with a new capitalization and organizational structure. Our proposed business plan envisages significant strategic initiatives and investments in a right-sized network of large format and small retail stores, digital assets and interdependent operating businesses.”
