Transform Holdco Makes Bid For Sears Hometown & Outlet Stores

Sears Hometown & Outlet Stores said it received a proposal on Friday, April 5, from Transform Holdco LLC, an entity affiliated with the company’s majority stockholder ESL Investments, Inc., to acquire all of the outstanding shares of the company’s common stock not already owned by ESL and its affiliates for a purchase price of $2.25 per share.

Edward Lampert, former chairman of Sears Holdings Corp., acquired Sears Holdings out of bankruptcy through an affiliate of his company, ESL Holdings. An affiliate of ESL, Transform Holdco LLC, acquired Sears Holdings for approximately $5.2 billion.

The board of directors of Sears Hometown & Outlet Stores has granted a special committee of independent directors the exclusive authority to review and evaluate the proposal and, if deemed advisable by the special committee, to engage in discussions or negotiations concerning the deal. The special committee is composed of Kevin Longino, William Phelan and David Robbins. Robbins serves as chair of the special committee.  The special committee has retained PJ Solomon as its financial advisor and Shearman & Sterling LLP as its legal advisor.

The proposal stated that Transform would only intend to proceed with its proposal if it is approved by the full board of directors of the company upon the recommendation of the special committee.

Further, following the review of the initial proposal by the special committee and its advisors, the special committee concluded that a transaction would not be in the best interests of the company’s unaffiliated stockholders and communicated that conclusion to representatives of Transform. The parties, however, said they are continuing discussions regarding potential transactions between the two companies.