Sears Holdings Corp. CEO Eddie Lampert, through his investment vehicle ESL Investments Inc., has submitted a nonbinding proposal to acquire the department store chain's Kenmore and Sears Home Improvement Products Inc. units, according to an amended ownership filing dated Aug. 14.
Lampert has been proposing to acquire the units since April for an all-cash transaction. In the amended 13-D filing, Lampert disclosed a 74% ownership, or 155,000,804 shares, in Sears. It reflects an increase of 670,942 shares from July 6.
Through his hedge fund, Lampert issued a letter to Sears' special committee, proposing to acquire Kenmore for $400 million and Sears Home Improvement Products, or SHIP, for $70 million. ESL Investments is also considering acquiring the Parts Direct business of the Sears Home Services division but said it is prioritizing the transactions involving Kenmore and SHIP.
ESL added that the Kenmore and SHIP transactions contemplate an additional contingent payment of $10 million if the 2018 stand-alone EBITDA of the SHIP business achieves 85% of the SHIP management projections.
The firm said it is prepared to enter into definitive agreements as early as Aug. 24. "We believe, therefore, that an expedited process is in the best interest of all parties involved," ESL said in the letter.
Moelis & Co. is acting as ESL's financial advisor in the transaction, while Cleary Gottlieb Steen & Hamilton LLP is acting as its legal counsel.