Retailer Sears Holdings has revealed it expects to receive US$346.5m in proceeds from a rights offering linked to the spin-off of its Hometown and Outlet businesses.

The rights offering ended yesterday (8 October) at 5:00pm New York time.

Sears Holdings expects to distribute 23,100,000 shares of common stock to the holders of subscription rights who validly exercised their rights and paid the subscription price in full, including pursuant to the exercise of the over-subscription privilege.  

Sears Hometown expects the common stock to begin trading on the Nasdaq Capital Market on 12 October.

Sears Holdings' board approved the spin-off to shareholders in August. 

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Sears Holdings Corporation Announces Expiration Of Rights Offering To Effect Separation Of Sears Hometown And Outlet Businesses

 

HOFFMAN ESTATES, Ill.Oct. 9, 2012 /PRNewswire/ -- Sears Holdings Corporation (NASDAQ: SHLD) today announced that the subscription period of its previously announced rights offering to effect the separation of Sears Hometown and Outlet Stores, Inc. ("Sears Hometown") from Sears Holdings expired at 5:00 p.m.New York City time, on October 8, 2012.  Sears Holdings previously announced that the rights offering would expire on October 8, 2012, unless extended by Sears Holdings' Board of Directors.

Preliminary results indicate that over 95% of the outstanding shares of common stock of Sears Hometown, par value $0.01 per share (the "Common Stock") were subscribed for pursuant to the exercise of basic subscription rights by holders of the subscription rights.  In addition, holders of subscription rights who exercised their basic subscription rights in full requested to purchase a number of additional shares of Common Stock pursuant to the over-subscription privilege such that the rights offering is expected to be fully subscribed.  Accordingly, Sears Holdings expects to distribute a total of 23,100,000 shares of Common Stock to the holders of subscription rights who validly exercised their subscription rights and paid the subscription price in full, including pursuant to the exercise of the over-subscription privilege.  

Based on these preliminary results, Sears Holdings estimates that it will receive aggregate gross proceeds from the rights offering of approximately $346.5 million dollars.  As part of the separation transactions, Sears Hometown will enter into an asset-based senior secured revolving credit facility with a group of financial institutions to provide (subject to availability under a borrowing base) for aggregate maximum borrowings of $250 million.  Sears Hometown plans to draw $100 millionunder this facility to pay a cash dividend to Sears Holdings prior to its separation from Sears Holdings, which will constitute a portion of the $446.5 million in anticipated gross proceeds to Sears Holdings from the separation transactions.

Subscription rights that were not properly exercised by 5:00 p.m.New York City time, on October 8, 2012 have expired and are no longer exercisable.

The results of the rights offering and Sears Holdings' estimates regarding the number of shares to be issued and the gross proceeds to be received by Sears Holdings are preliminary and subject to finalization and verification by the subscription agent, Computershare, Inc. Sears Holdings expects Computershare, Inc. to finish tabulating the results on or about October 9, 2012.

Sears Holdings expects that on October 11, 2012, after the subscription agent has effected all allocations and adjustments contemplated by the terms of the rights offering, the rights offering will be completed and the subscription agent will distribute, by way of direct registration in book-entry form, the shares of Common Stock to holders of subscription rights who validly exercised their subscription rights and paid the subscription price in full.  No physical share certificates will be issued.

Sears Hometown expects that the Common Stock will begin to trade on the Nasdaq Capital Market under the symbol "SHOS" on October 12, 2012.

If you have questions about the rights offering, please contact Georgeson Inc., our information agent, by calling (866) 695-6074 (toll-free) or, if you are a bank, broker or other nominee, (212) 440-9800.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy shares of Common Stock, nor shall there be any sale of these securities in any state in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such state.

 

Original source: http://www.prnewswire.com/news-releases/sears-holdings-corporation-announces-expiration-of-rights-offering-to-effect-separation-of-sears-hometown-and-outlet-businesses-173259061.html