Sears Update: Retailer Looks To Buy Back Sears Hometown And Outlet Stores Again

Sears Chairman Eddie Lampert and his hedge fund, ESL Investments, are looking to purchase the Illinois-based Sears Hometown and Outlet Stores, the same business it let go of in 2012. The move by Lampert would give Sears full ownership of the company if the two retailers can come to a deal.

Sears Hometown said it received a proposal Friday from Lambert and ESL, looking to purchase the remaining shares of the company at a price of $2.25 per share, USA Today reported. To date, Lampert, ESL, and its affiliates hold a 59 percent stake in Sears Hometown, according to the U.S. Securities and Exchange Commission.

Sears Hometown has 677 locations under the Sears Hometown, Sears Hardware, Sears Home Appliance Showroom, and Sears Outlet brands. The retailer sells appliances, hardware, tools, and lawn and garden equipment.

The deal from Lampert comes a day after Sears announced it would be opening three smaller footprint stores in May. The full deal for the Hometown business is worth an estimated $21 million, according to the letter that Lampert wrote to the board of directors at the retailer.

"We believe our proposal, which will provide certain value and liquidity at a considerable premium to the market price, presents a superior outcome for the Company’s stockholders as compared to the uncertain outcomes facing the Company if it continues on its current path as a stand-alone company," Lampert wrote.

Financing for the deal, according to Lampert, would come from cash or an ESL loan or monies from other members, also in the form of a loan. The deal would only move forward if the full board approved the proposal, Lambert said.

In a statement, Sears Hometown said that it is opposed to the deal as it “would not be in the best interests of the Company's unaffiliated stockholders." Although, the company went on to say that "The parties are continuing discussions regarding potential transactions between the parties."

Sears filed for Chapter 11 bankruptcy in October, emerging through a $5.2 billion deal from Transform Holdco LLC, the company that Lampert formed to buy the retailer. The company has approximately 425 Sears and Kmart locations and 45,000 employees.