Sears Holding Corp. (SHLDQ) is facing liquidation as early as tomorrow. The company’s last hope is hinged on a $4.6 billion bid by Chairman Eddie Lampert. According to a report by CNBC, Lampert has offered to buy Sears as a whole through ESL Investments, the hedge fund he manages, in order to save the retailer from bankruptcy.
However, Lampert has not yet submitted his proposal or made funding arrangements. The deadline for the bid is 4 pm ET, Friday and some insiders believe he might put forth his proposal at the last minute. If Lampert submits the proposal, Sears will have one week to consult with its advisors to determine his ability to participate in the auction, which will take place in mid-January.
If Lampert fails to meet the deadline, the liquidation process for Sears and Kmart will begin. The report states that Lampert and ESL are the only ones willing to buy Sears as a whole. Sears filed for bankruptcy in October and has announced a large number of store closures since then. It is likely the company will have to close more stores soon.
As per the report, Lampert’s $4.6 billion proposal consists of various tranches of financing but not much of his own money. Although the Sears chairman has been looking for a loan, investment banks do not appear very keen to put their money into a loss-making business. Some parties have criticized his efforts, terming it a gamble.
As of 12:20 pm ET, Sears’ stock was up 9.2%.
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