By DAMIAN TROISE AND ANNE D’INNOCENZIO, AP Business Writers
NEW YORK (AP) — Eddie Lampert’s hedge fund, Sears’ biggest shareholder, has asked the struggling retailer to sell the Kenmore brand and its home improvement business, the company confirmed Monday.
The private equity firm ESL Investments said that it might buy the assets if the company is willing to sell, sending shares of Sears Holding Corp. up nearly 5 percent in early trading.
With the offer, Lampert appears to be pushing for a breakup of the 125-year-old company that has survived two world wars and the Great Depression.
Sears has been trying to sell the businesses for nearly two years but it has been unable to do so, according to Lampert’s letter to the board.
The company did sell Craftsman to Stanley Black & Decker last year.
ESL said it would also be open to making an offer for Sears’ real estate including the assumption of the $1.2 billion in debt.
“In our view, pursuing these divestures now will demonstrate the value of Sears’ portfolio of assets, will provide an important source of liquidity to Sears and could avoid any deterioration in the value of such assets,” Lampert wrote.
Sears has been closing locations, cutting costs and selling brands to offset falling sales. The company said this year that it would close more than 100 Kmart and Sears stores.
Kenmore is among the brands that could have substantial value. Amazon.com began selling the appliances on its site almost a year ago.
ESL said its non-binding proposal gives the appliance and home improvement business an enterprise value of $500 million. ESL said it would also be open to assuming some of Sears’ debt.
Sears’ shares have dropped more than 70 percent in the past 52 weeks.
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