Eddie Lampert offered to buy Sears Holdings Corp. out of bankruptcy in a bid to salvage the failing retail empire he has controlled for more than a decade.
The chairman of Sears, whose ESL Investments ranks as the biggest shareholder and creditor, outlined a $4.6 billion preliminary bid in documents released Thursday that could include a mix of cash, equity new loans and debt swaps. Lampert would take over the whole company, rather than just buying selected stores as originally planned, and preserve about 50,000 jobs, according to the documents.
It’s the latest in a long series of bailouts Lampert has provided for Sears that preceded its slide into bankruptcy this year. The new bid is designed to head off outright liquidation of Sears, which has struggled to get support from lenders and suppliers who aren’t sure that the iconic retailer can survive, and Lampert’s new bid may not quell those doubts.
“It’s a last-ditch effort,” said Farla Efros, president of HRC Retail Advisory. “They want to be able to hold onto any equity that they can actually hold onto, and it’s really about ego and saving face.”
The deal will hand Lampert more money and professional fees while the equity holders and lenders will see their investment evaporate, said Burt Flickinger, managing director of Strategic Resource Group, a retail-advisory firm.