Regulators Put Sears Bid for Canadian Unit on Hold
Toronto, Ontario, August 8, 2006--Canada's main securities regulators put the brakes on Sears Holdings Corp., C$892-million ($775 million) buyout offer for its Canadian unit on Tuesday, saying the bidder had "fallen short of disclosure obligations."
The Ontario Securities Commission ruled Sears Holdings will have to exclude votes held by four entities--Scotia Capital Inc., Bank of Nova Scotia, Royal Bank of and Vornado Realty Trust--from its calculation of the required majority of the minority approval.
Sears Holdings had support agreements with the four, which own a pivotal voting block.
The decision follows a hearing held by the commission last month after a complaint was filed by a group of dissident shareholders of Sears Canada, including hedge fund Pershing Square Capital Management LP., which wanted the banks' shares to be excluded from counting toward the bid thresholds.
Sears Holdings, which has long held a majority stake in Sears Canada, has offered to buy the remainder of the Canadian retailer for C$18 per share.
It declared victory earlier this year after winning the support of most of the minority shareholders of Sears Canada to take the retailer private.
