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Sears Proxy


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Hi All,


Hat tip to NFI for posting this on the blog.  The following in a piece from the Sears Proxy dated April 11, 2011.



"ESL provides consulting services to the Company pursuant to an agreement entered into as of January 30, 2011. The consulting services involve, among other things, strategic planning, financings and other financial matters, legal risk analysis and management, personnel, mergers, acquisitions and divestitures, new business and business development and general corporate, operational, and organizational matters. The consulting agreement provides for a monthly fee of $41,666.67 plus reasonable out of pocket expenses. The Company has granted rights to indemnification and advancement of defense expenses to ESL and its directors, officers, controlling persons, agents, representatives and employees in connection with legal proceedings to which the indemnified person is made a party or is threatened to be made a party by reason of the services provided under the consulting agreement."






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Are we now betting on an ESL takeover of the remaining SHLD stock?


Why would this portend an ESL buyout?  Is that sort of thing typical in advance of a buyout?  I do think ESL, or some other Lampert vehicle, taking it private is the ultimate goal, but how does this move that date forward?  


$500,000 for a year of consulting services is chump change to ESL and SHLD, so I didn't think anything of it.  I suppose it would pay for some staff time and overhead for working out the details of a buyout.


Just thinking outloud ...


ESL taking SHLD private is the likely end-game

New CEO has experience guiding business through buyout process

SHLD pays ESL for consulting services that include mergers, acquisitions, etc.


Hmmm . . . you might be on to something.

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Sears Holdings owns roughly 93% of Sears Canada.  The proxy language quoted above would make sense in the context of Holdings preparing to bid for the remaining shares of Sears Canada that it doesn't own.  


That said, there are obviously many possibilities...


And how much do we value and the market value that 7% at?

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