ESL Investments offers $480m to buy Sears’ Kenmore

17 August 2018 (Last Updated August 17th, 2018 14:23)

ESL Investments, a hedge fund owned by Sears Holdings CEO Edward Lampert, has offered to acquire Sears' Kenmore appliances brand for $400m in cash and home improvement business for around $80m in cash.

ESL Investments, a hedge fund owned by Sears Holdings CEO Edward Lampert, has offered to acquire Sears’ Kenmore appliances brand for $400m in cash and home improvement business for around $80m in cash.

The hedge fund is also reportedly planning for a deal for the company’s Parts Direct business, reported Pyments.com. Although ESL’s initial focus will be the home improvement business and Kenmore brand.

These offers were made in a letter to Sears’s board.

In a filing with the US Securities and Exchange Commission, ESL stated that this offer is subject to equity financing from a potential partner.

The name of the partner has not been undisclosed.

In April, Sears CEO stated that the retailer should divest its Kenmore brand, home improvement businesses and real estate. He also announced that ESL Investments will be the bidder for any such divestments, reported CNBC.com.

“Retaildive.com reported that a divestment of Kenmore to ESL will deepen the financial ties between Sears and its CEO.”

In May, Sears set up a panel to explore these proposals.

In its first quarter of the 2018 fiscal year, Sears posted a net loss attributable to the company of $424m as against a profit of $245m during the same period a year earlier.

In the first quarter, store closures impacted the revenue by almost 31%.

Retaildive.com reported that a divestment of Kenmore to ESL will deepen the financial ties between Sears and its CEO.

Earlier, the retail company borrowed hundreds of millions of dollars from the hedge fund as well as divested several properties to a venture controlled by Lampert’s fund.