Sears Chairman Eddie Lampert is upping the ante in his effort to buy the bankrupt retailer he ran for nearly half a dozen years. The billionaire investor, formerly Sears' CEO and majority shareholder, through his hedge fund ESL Investments raised his offer to $5 billion, from $4.4 billion, in a bid to win approval from a federal bankruptcy court.
"We believe our proposal will provide substantially more value to stakeholders than any other option, in particular a liquidation, and is the best path forward for Sears, its associates and the many communities across the United States touched by Sears and Kmart stores," ESL said in an emailed statement to CBS MoneyWatch. "We look forward to having our proposal evaluated by the debtors at Monday's auction."
ESL's sweetened bid includes as much as $166 million to pay stiffed suppliers, $139 million to cover expenses tied to the costly bankruptcy process and another $43 million for additional severance costs, the last of which was welcomed by worker advocates.
"By including severance payment, Lampert's bid proves that retail employees' organizing to fight for job security, severance and financial support is having a major impact on the bankruptcy process," said United for Respect's Rise Up Retail in statement.
Rise Up Retail successfully advocated for financial relief forlaid off without severance and recently launched a similar
Sears Holdings was headed to liquidation after ESL's first offer was spurned, but negotiations that revolved around a court hearing on Tuesday resulted in Lampert, who remains the retail company's biggest shareholder and chairman, getting another go.
The hedge fund then had a court-ordered deadline on Wednesday to improve its offer and come up with $120 million to participate in an auction on Monday. Assuming Lampert's latest offer gets the green light from creditors and the bankruptcy judge, he can go up against bidders looking to buy up Sears Holdings assets through the bankruptcy process.
Just over 500 Kmart and Sears stores remain open, but liquidation sales are already in the works at 80 of those stores, and Lampert's proposal involves running 425 stores.