American privately held company Transform Holdco has made an offer to buy all of the remaining shares of Sears Hometown and Outlet Stores for $2.25 per share.
Transform Holdco chair Eddie Lampert currently owns nearly 58.8% interest in Sears Hometown, through his hedge fund ESL and its affiliates.
In order to review and evaluate the proposal, Sears Hometown board of directors has appointed a special committee of independent directors. Transform Holdco will proceed with the deal after receiving approval from all the board of directors.
PJ Solomon is acting as the financial advisor, with Shearman & Sterling as the legal advisor to the special committee.
In a letter to Sears Hometown’s board, Lampert said: “We believe our proposal, which will provide certain value and liquidity at a considerable premium to the market price, presents a superior outcome for Sears Hometown & Outlet Stores stockholders as compared to the uncertain outcomes facing Sears Hometown & Outlet Stores if it continues on its current path as a standalone company.
“In addition to the immediate value provided to Sears Hometown & Outlet Stores’ stockholders, we believe that the transaction would benefit the company’s other stakeholders, including employees, independent dealers and franchisees and the local communities that rely on them.”
Following the review, the special committee decided that the deal, on the terms contemplated by the proposal, is not in the best interests of the company’s unaffiliated stockholders. Both companies are now continuing discussions regarding future potential deals.
According to the company’s website, Sears Hometown is not part of the bankruptcy filing by Sears Holdings and remains in business as usual. In February this year, Transform Holdco acquired the go-forward retail footprint, assets and component businesses of Sears Holdings for approximately $5.2bn.