Sears taking Kenmore sale offer seriously, forms special committee

Sears shares climbed on Monday, following the company’s report that it will start a formal process to explore the sale of its Kenmore brand and related assets.

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The company’s announcement comes after a hedge fund run by Sears CEO Eddie Lampert, which is also a major lender to the struggling retailer, recommended the divestiture of a number of the chain’s assets, including the Kenmore brand, the Sears Home Improvement business and the PartsDirect business. Lampert’s hedge fund, ESL Investments, made the recommendation to divest on April 23.

In response to that recommendation, Sears is forming a panel of independent directors to evaluate ESL's proposal and also actively solicit third-party interest in the assets while also exploring alternative opportunities for these assets.

The company’s major lender also offered a deal for the assets. A letter from ESL said the company was willing to bid $500 million to acquire the Sears Home Services division and PartsDirect, and would also be willing to purchase some of the Sears’ real estate, including assuming $1.2 billion in Sears’ debt to lease it back to the stores for continued operation.