Hoffman Estates, IL, December 5, 2005--Sears Holdings has offered to buy the remaining stake in Sears Canada for about $718.5 million. The company owns about 53.8 percent of Sears Canada's.
The company offered 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% premium over Friday's closing price and a 22.2% 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.
In announcing the offer, Alan Lacy, vice chairman of Sears Holdings, said: "The Sears Holdings proposal represents an excellent opportunity for Sears Canada shareholders to realize a premium and liquidity for their shares. On a stand-alone basis, Sears Canada's retail business faces an increasingly competitive retail environment in Canada, and the principal factor that will determine the value of this business is the prospects for its retail operations. We intend to maintain a controlling ownership interest in Sears Canada, but believe Sears Canada will have a much greater opportunity to succeed with the benefits that will come with 100% ownership."
Lacy added, "We expect to continue to operate Sears Canada as a retail business. Sears Canada has long been an important part of the retail landscape in Canada and, with our shared brand name, is strategic to Sears Holdings. With the benefits that will accrue from 100% ownership, we believe we will be able to provide Sears Canada's associates and customers with the opportunity to continue their relationship with this Canadian institution."
