Fund bids $4.6 billion for Sears

Billionaire who led Sears into bankruptcy offers to buy it

The 500 stores Lampert and ESL want to retain include the Sears at Whitehall Mall in Whitehall Township, along with three area Kmarts - one each in Wilson, Walnutport and Wind Gap, according to the SEC filing.

The hedge fund run by Sears chairman Edward Lampert is offering to buy much of Sears' remaining assets for about $4.6 billion with hopes of keeping the bankrupt retailer in business and continuing to employ about 50,000 of its workers.

"Sears is an iconic fixture in American retail, and we continue to believe in the company's vast potential to evolve and operate profitably as a going concern with a new capitalization and organizational structure", Lampert, who remains chairman of the board at Sears, said in a statement.

The Sears chairman and ESL founder own just under half of the Hoffman Estates, Illinois, company, according to FactSet.

"ESL Investments continues to believe in Sears Holdings' enormous potential to evolve and operate profitably as a going concern with a new capitalization and organizational structure", ESL said in a statement. The offer is subject to due diligence and ESL's ability to get financing, among other things.

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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. That could a concern for other creditors. The bid was made in response to a November 21 filing with the bankruptcy court on behalf of the debtors. The offer includes $950 million in cash through an asset-based loan facility and a "credit bid" of $1.8 billion.

That sum could go dramatically up or down, depending on how the bankruptcy process evolves, the publication noted.

After years of plunging sales and declining store traffic, Sears filed for Chapter 11 bankruptcy last October and said it would close 142 underperforming store locations. The more recent budget came after Sears said it planned to sell 505 stores that would continue in business, about 100 more than initially planned, which may have affected revenue forecasts.

The hedge fund, the retailer's largest shareholder and creditor, would also forgive $1.8 billion Sears owes it in exchange for the company's assets, a bankruptcy manoeuvre known as credit bidding.

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