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Sears Canada in $719M Buyout

HOFFMAN ESTATES, IL-Sears Holdings Corp. offers C$35.50 for all of the outstanding shares of Sears Canada Inc.

By Jennifer D. Duell | Updated on December 06, 2005

HOFFMAN ESTATES, IL-Sears Holdings Corp. has put all the pieces in place to acquire Sears Canada Inc. for $719 million. The company is offering C$35.50 for all of the outstanding shares of the Toronto-based retailer, an 8.7% premium above Friday’s closing price and a 22.2% premium over the average closing price since Aug. 31.

Sears Holdings already owns more than 57 million common shares, representing roughly 53.8% of the outstanding common shares of Sears Canada. The buyout involves 46.2% of Sears Canada shares that are not held by Sears Holdings. Sears Canada’s next largest shareholder, Natcan Investment Management Inc. had agreed to sell off its 9.7 million shares (or 9.06% of the outstanding shares).

Sears Holdings’ vice chairman Alan Lacy says in a statement that Sears Canada’s best opportunity for success is total ownership by Sears Holdings. “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,” he states.

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