Sears Holdings Corp. won a reprieve from liquidation after its chairman submitted an eleventh hour offer to buy the bankrupt chain. But the company’s future remains uncertain.
Sears chairman Eddie Lampert met the Dec. 28 deadline imposed by the company for potential buyers of Sears assets. (The offer came just in time to meet the 4 p.m. deadline, CNBC reported.).Transform Holdco LLC, an affiliate of Lampert’s ESL Investments hedge fund, submitted a bid for substantially all of the assets of Sears, including a portfolio of 425 stores, which it valued at $4.4 billion.
The offer came in hours after Sears announced it will close 43 Sears stores and 37 Kmart stores in late March. The new round of closings, which are on top of 40 Sears and Kmart stores set to close in February, accounts for the difference between the 425 stores in Friday’s bid and the $4.6 billion non-binding offer ESL made at the beginning of December.
The bid, which includes a $1.3 billion financing commitment from three unnamed financial institutions, doesn't guarantee that Sears will avoid liquidation. The company and its advisers must determine by Jan. 4 whether the bid is "qualified." If it is found to be qualified, ESL can take part in an auction against liquidation bids at the bankruptcy court auction on Jan. 14.
A spokesman for Transform Holdco said that should the ESL bid be accepted and become the winning offer, the expectation is that Sears, upon emergence from Chapter 11 proceedings, “would offer employment to up to 50,000 associates” and reinstate severance protections for eligible employees who accept their employment offer, Women’s Wear Daily reported. Whether Sears would actually employ up to 50,000 store associates is dependent on “any further actions the company may take between now and closing.”