Sears Holdings Gets Offer From Lampert’s ESL Investments Valuing Kenmore at $400 Million

Sears Holdings (SHLD) received an offer for its Kenmore appliance brand and its home services division in a bid made by ESL Investments, the fund controlled by Sears Chief Executive Officer Edward Lampert.

ESL is offering to buy Kenmore with an enterprise value of $400 million, and the home services branch known as SHIP for a cash-free, debt-free enterprise value of $70 million and an additional contingent payment of $10 million if certain targets are met.

ESL delivered the offer to a Sears special committee in a letter Tuesday, the company said in a regulatory filing. The fund said it was restating its “firm belief that these transactions should be undertaken together with tender and exchange offers designed to allow Holdings to reduce its debt, extend its maturity profile and alleviate its liquidity challenges.”

Sears has struggled under mounting debt and declining sales, prompting the retailer to shut stores across the US in a bid to manage costs.

It’s also been looking to sell off some brands, and it marketed Kenmore, SHIP and PartsDirect businesses of the Sears Home Services division for about two years but was unable to reach agreement with potential buyers. It offloaded its Craftsman tool brand in 2017.

Sears said that “while ESL continues to evaluate a potential transaction involving PartsDirect, it has prioritized transactions involving Kenmore and SHIP” because of the complexities of separating PartsDirect from the home services division and the timeline needed to complete such a transaction.

In April, ESL made and offer to by SHIP and PartsDirect for an enterprise value of $500 million and said it was willing to submit a bid for Kenmore.