Edward Lampert, chairman of Sears Holdings, has thrown yet another lifeline to the troubled department store retailer, having made a new takeover bid of more than US$5bn.

The move comes days after Sears reportedly rejected a $4.4bn lifeline from Lampert and could increase the likelihood of the department store staying in business – should it be approved.

Lampert's latest offer, the details of which were first reported by Reuters, will be assessed by Sears during a bankruptcy auction on 14 January. It is understood the company will consider whether the bid offers more value to creditors than a liquidation.

"ESL Investments, Inc is pleased to confirm the submission by the deadline of a significantly improved going concern bid by Transform Holdco LLC, a wholly-owned affiliate, for substantially all of the assets of Sears Holdings Corporation for a total consideration in excess of $5bn as well as the requisite deposit of $120m," a spokesperson for ESL Investments, Inc - Lampert's investment firm - said in a statement.

"We believe our proposal will provide substantially more value to stakeholders than any other option, in particular a liquidation, and is the best path forward for Sears, its associates and the many communities across the United States touched by Sears and Kmart stores. We look forward to having our proposal evaluated by the debtors at Monday's auction."