Toronto, Ontario, November 15, 2006--Sears Holdings latest attempt to continue its privatization bid for Canadian subsidiary Sears Canada has been halted, after an Ontario court denied an application allowing Sears Holding to appeal a provincial regulator's decision on the issue.
Separately, Sears Canada's minority shareholders voted 61.5% against the resolution that would have given 100% control to Sears Holdings. Sears Canada's shares soared nearly 12% to C$25.99 ($22.93) during late-morning trading on the Toronto Stock Exchange.
Sears Holdings owns 54% but can't take the unit private unless the holders of a majority of Sears Canada's minority shares approve the deal, which values the firm at nearly C$1bn ($882m). Sears Holdings had extended its $18-per-share ($15.88-per-share) buyout offer until 20 November.
The company had hoped to appeal a court ruling that upheld an Ontario Securities Commission finding that it had violated the province's securities laws. The OSC ruled in August that Sears Holdings failed to disclose support agreements it struck with the Bank of Nova Scotia, Scotia Capital Inc. and the Royal Bank in connection with the buyout. The OSC ruled that the banks' large shareholdings in Sears Canada cannot be counted in determining whether the Sears takeover succeeds.
