Troy, MI, August 10—Kmart has updated its previously announced transaction with The Home Depot.
Kmart and Home Depot initially entered into an agreement that provided for the sale of up to 24 stores for a purchase price of up to $365 million subject to the satisfaction of various conditions.
The companies have now revised their transaction to provide for the sale of no fewer than 13 stores for $173 million in cash, and up to 19 stores for $288.5 million in cash.
Additionally, Kmart has been granted an option to sell certain stores which, if exercised by Kmart, would increase the minimum number of stores sold to 15 and the minimum cash to be received to $214 million. The revision of the transaction was the result of certain closing conditions not being satisfied with respect to certain of the stores.
The sale with respect to 4 of the stores has already been completed and cash proceeds of $59 million have been received from The Home Depot. The sale of an additional nine stores will be completed and cash proceeds received into escrow within the next five days, with such funds to be released to Kmart upon the transfer of occupancy thereof.
Kmart is to proceed with the store-closing sales on those stores sold to Home Depot promptly upon the consummation of the property sales, and will receive proceeds from the store inventory and fixtures in addition to the sale proceeds.
Kmart will announce second quarter 2004 earnings on Monday, August 16, 2004.
