Sears Holdings Corp. (Hoffman Estates, Ill.) is proposing acquiring all of the outstanding common shares of Sears Canada Inc. (Toronto).
The U.S. retailer, the combination of Sears Roebuck & Co. and Kmart Holdings, currently owns 54 percent of the nearly 300-unit department and specialty retailer.
The offer would be worth approximately C$835.4 million (US$718.5 million). Following the transaction, Sears Canada would become a wholly owned subsidiary of Sears Holdings.
“The Sears Holdings proposal represents an excellent opportunity for Sears Canada shareholders to realize a premium and liquidity for their shares,” said Sears Holdings vice chairman Alan Lacy. “On a standalone basis, Sears Canada's retail business faces an increasingly competitive retail environment in Canada, and the principal factor that will determine the value of this business is the prospects for its retail operations. We intend to maintain a controlling ownership interest in Sears Canada, but believe Sears Canada will have a much greater opportunity to succeed with the benefits that will come with 100 percent ownership.”
Lacy insisted that the company expects to continue operating Sears Canada as a retail business. “Sears Canada has long been an important part of the retail landscape in Canada,” Lacy said, “and, with our shared brand name, is strategic to Sears Holdings.”
One Sears Canada investor, Natcan Investment Management Inc. (Montreal), has agreed to tender all of its common shares, approximately 9.06 percent of the total outstanding.
Sears Canada operates about 121 department stores, selling home fashions, appliances and apparel. It also runs nearly 50 furniture and appliances stores, a dozen outlet stores and the largest catalog business in Canada, plus about 50 auto service centers, more than 50 floor covering stores and about 110 travel agency offices.