Sears Holdings mulls picking Sears Canada's public stake
06 Dec '05
3 min read
Home appliance retailer Sears Holdings Corporation announced that it is proposing to acquire all of the outstanding common shares of Sears Canada Inc, other than those already held by Sears Holdings and its affiliates, for C$16.86 per common share in cash, after the distribution to shareholders of the C$18.64 per share distribution announced last Friday by the Board of Directors of Sears Canada.
The offer represents a 8.7 percent premium over Friday's closing price and a 22.2 percent premium over the average closing price since August 31, 2005, the date that Sears Canada announced it had entered into an agreement to sell its Credit and Financial Services business, and is more than two times the closing price at the beginning of the year, in each case, adjusted for the C$18.64 distribution.
Sears Holdings currently owns 57,732,517 common shares or approximately 53.8 percent of the outstanding common shares of Sears Canada.
The aggregate consideration payable under the proposal for 46.2 percent of Sears Canada shares that are not held by Sears Holdings would be approximately C$835.4 million (US$718.5 million). Following the transaction, Sears Canada would become a wholly owned subsidiary of Sears Holdings.
Sears Holdings also announced that it has entered into a lock-up agreement with Natcan Investment Management Inc,
("Natcan") which has agreed to tender all 9,699,862 common shares that it owns or controls in response to Sears Holdings' offer, or approximately 9.06 percent of the outstanding common shares of Sears Canada.
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