US-based department store chain Sears Holdings has sought court approval to sell its Sears Home Improvement business (SHIP) through a ‘stalking horse’ asset purchase agreement with Service.com for approximately $60m in cash.
The sale process will be conducted under Section 363 of the US Bankruptcy Code and has received approval from the company’s restructuring committee featuring its independent directors.
Based in Longwood, Florida SHIP is a business unit of the Sears Home Services division.
Sears Holdings chief financial officer Robert A Riecker said: “The sale of SHIP is an important step for Sears Holdings as we continue working to achieve a comprehensive restructuring.
“We look forward to completing this process expeditiously so that we can maximise the value of SHIP and ensure a seamless transition for all of our stakeholders.”
In addition, other qualified bidders will be allowed by the retailer to submit competing bids through a court-supervised sale process through Lazard Frères.
The auction process and final agreement are subject to the approval of the court while the completion of the transaction is subject to customary closing conditions and regulatory approvals.
Service.com CEO Sandy Kronenberg said: “Service.com is excited about the possibility of combining with SHIP. This would not have been feasible without the support of Peter Karmanos’ MadDog Ventures.”
Sears has also requested the court to consider the proposed bid procedures on 15 November and expects to complete the transaction by early January 2019.
Last month, the retailer filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code in the US Bankruptcy Court for the Southern District of New York.
In a separate development, sources familiar with the matter were quoted by Reuters as saying that the retailer is currently negotiating a deal with chairman Eddie Lampert and lenders “to expand a bankruptcy financing package that would help it avoid liquidation.”