Sears set to stay open after last ditch bid prevents liquidation, sending shares surging
- 126-year-old retailer Sears has grabbed a lifeline after billionaire hedge-fund manager Edward Lampert won a bankruptcy auction.
- The result means that around 400 stores will stay open following a $5.2 billion bid.
- Sears filed for protection from creditors in October and has been in a battle for its future ever since.
- Sears was trading up 28.3% to $0.64 following the news.
A last ditch effort from billionaire hedge-fund manager Eddie Lamper is set to keep Sears alive after beating off competition for the legacy retailer.
The department store will keep open around 400 branches as a result of the $5.2 billion deal which Edward Lampert, the company's chairman, sweetened after discussions with creditors. Once America's largest retailer, Sears will remain in existence with approximately 425 stores - it had 2000 in 2013.
Lampert's deal beat out a bid by Abacus Advisory Group, which was supported by most creditors and landlords, which planned to close all the stores and sell Sears' inventory. The revised bid, which came about after weeks of back and forth negotiations, will save around 45,000 jobs, according to Reuters.
Read more: Inside Sears' death spiral: How an iconic American brand has been driven to the edge of bankruptcy
Sears' stock price topped out at more than $122 in 2007, giving the retailer a market capitalization of nearly $30 billion. But the retailer filed for Chapter 11 bankruptcy in October after struggling with shifts in consumer spending, and the rise of e-commerce, among other things, eventually leading to a collapse in share price. At Tuesday's closing bell, Sears' market value was at $54.1 million.