Sears shares Rise after Exploring possible Asset Sales

Sears Holding Corporation (NASDAQ: SHLD) shares jumped Monday after it announced that it will begin exploring the sale of its Kenmore brand and related assets such as, Sears Home Improvement Products business and parts of Sears Home Services division.

Sears’ shares jumped by 14.2 percent shortly after the opening bell on Monday.

Sears Chief Executive Officer Edward Lampert’s investment firm, ESL Investments Inc. advised that Sears should look into selling some of its assets in portions or entirely, which includes the Kenmore brand.

Last month, ESL expressed interest in buying the business divisions, if it was based on an enterprise value of $500 million as well as buying the assets for cash financed with equity contributions from ESL and a third-party debt financing.

Sears’ statement last month noted that those assets hold a large value in the company and selling off one or more of them would improve the company’s debt or possibly avoid bankruptcy.

The Board created a Special Committee, consisting of independent directors to evaluate ESL’s proposal to look into the sales of its assets, as well as exploring other alternatives to maximize value for the company.

Sears has lost almost $11 billion since 2010, which was its last profitable year, but it was able to default some of its debt last month when it got lenders to accept an extended repayment schedule.

Sears also stated that it “does not intend to comment further with respect to the Sale Assets unless and until it determines that additional disclosure is appropriate.” Lampert has also previously mentioned that he would not take part in the potential sales involving ESL due to his large stake in Sears.

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