Shares of struggling retailer Sears hit a new all-time low after news surfaced that the company’s CEO Eddie Lamper’s hedge fund is wanting to by the Kenmore Brand.
Lamper’s ESL Investments hedge fund said it would buy the Kenmore brand from Sears for $400 million in an all cash transaction. This is on the condition that it can secure additional financing.
The hedge fund had also made an offer to buy Sears’ Home Improvement business for as much as $80 million in cash. The offer was revealed by both companies in a filing with the SEC.
ESL Investments has said that it has been in talks with potential investors and is confident it can secure the financing to close on the deal.
“We are prepared to move as quickly as possible to complete these transactions, which is in the best interest of all parties involved,” a spokesman for ESL said to CNBC.
The SEC has also revealed that ESL Investments is exploring options to sell “all or portions of” Sears’ remaining real estate: “We believe such a transaction could accelerate, and provide Sears with greater certainty than, its existing real estate divestiture efforts.”
“If there were no other bidders for Kenmore, then presumably the board is selling it a price that is considered fair based on peer values but also factoring in the absence of other bidders,” remarked Philip Emma, a retail analyst with Debtwire, to Retail Dive.
He added, “The real issue is understanding what the price is relative to the sales at Kenmore,” he added, noting that the figure is not currently made public.
Shares fell as much as 13% on this news as it collapsed to a new record low.
Earlier this month Sears announced that it has bolstered its online marketplace, adding top brands and popular products to sears.com sold by third-party sellers.
Sears said it is adding floor care brands Hoover®, Dirt Devil® and Oreck®; men’s and women’s national shoe brands Dockers®, G.H. Bass & Co.® and Lucky Brand®; and precious metals including gold, silver, platinum and palladium bullion bars, rounds and coins, as well as premium bullion products.
Peter Lai, chief online officer for Sears commented, “Sears continues to grow the online product selection offered by third-party marketplace sellers as we develop new relationships with leading companies to participate in the sears.com ecosystem. From top shoe brands and floor care appliances to gold bullion and commemorative coins, members can always find the products on sears.com that meet their needs.”
The company is expected to release its second quarter fiscal results on Thursday, August 30, 2018.
In the last year, shares of Sears have fallen over 80%.