Sears Takeover Bid Fails, Asks Bankruptcy Judge To Liquidate

Roman Schwartz
January 9, 2019

The end appears to be nigh for Sears.

One of America's most iconic businesses, which has been in business for over 125 years and still employees 68,000 people, is on the verge of liquidation after an eleventh-hour, $4.4 billion takeover bid failed to satisfy advisers to the company, which hasn't turned a profit in almost a decade.

The Sears board rejected Lampert's $4.4 billion bid Friday to acquire 425 Sears stores along with other assets of the bankrupt retailer - and a last-minute scramble to improve the offer has not moved the needle, sources tell The Post. Sears stock is trading at 22 cents a share on the New York Stock Exchange.

Once America's largest department store chain, Sears had 687 stores and 68,000 workers by the time the Illinois-based company filed for Chapter 11 bankruptcy protection in October.

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The chairman and CEO of Berkshire Hathaway warned 13 years ago, during a conversation he had in 2005 with students from the University of Kansas, that Sears Chairman Eddie Lampert's venture in merging Sears and Kmart was unlikely to succeed, as first reported by Business Insider.

One of the biggest sticking points is ESL's plan to pay for part of the deal by forgiving $1.3 billion in debt that Sears owes the hedge fund, which includes fees owed on stores sold to Seritage Growth Properties.

Retail expert Burt Flickinger discusses how Sears Chairman Eddie Lampert is trying to buy the company out of bankruptcy. Even as Sears' brick and mortar competitors established effective e-commerce operations Sears - a pioneer in catalog sales - failed to do so. Lampert loaned out his own money and put together deals to keep the company going, turning whatever profit he could for his hedge fund.

Reuters reports the negotiations between Lampert and the company broke down over the structure of his bid, as well as the former CEO's request to not be held liable for actions he took while servicing as the company's chief executive. The once-dominant retailer has about 500 stores still in operation.

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