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Sears picked Lampert's hedge fund ESL Investments Inc as the winner at a bankruptcy court-supervised auction after his latest bid topped an earlier $5 billion proposal following weeks of talks. The deal would keep open more than 400 stores, preserve up to 45,000 jobs and ESL would acquire substantially all of the company, including its "Go Forward Stores" on a going-concern basis, Sears said. "We are pleased to have reached a deal that would provide a path for Sears to emerge from the chapter 11 process," the restructuring committee of Sears' board of directors said in a statement.
Sears Holdings Corp (SHLDQ.PK) Chairman Eddie Lampert prevailed in a bankruptcy auction for the U.S. department store chain with an improved takeover bid of roughly $5.2 billion, allowing the 126-year-old retailer to keep its doors open, people familiar with the matter said Wednesday. Lampert's bid, boosted from an earlier $5 billion offer, prevailed after weeks of back-and-forth deliberations that culminated in a days-long bankruptcy auction held behind closed doors. The billionaire's proposal, made through his hedge fund ESL Investments Inc, will save up to 45,000 jobs and keep 425 stores open across the United States.
After two days of haggling, U.S. Bankruptcy Judge Robert Drain set a Wednesday deadline to complete the bankruptcy auction for the 126-year-old retailer, the people said. Sears was weighing Lampert's offer against the sum it would recoup by winding down its business and selling its assets off in pieces. Liquidating Sears would end the department store in its current form, meaning layoffs for as many as 68,000 people and the closure of about 500 stores.
In a statement, the company announced that its CEO, Edward Lampert, has stepped down and day-to-day operations will be managed by three high-ranking executives. Lampert will remain chairman of the board. It previously announced closure of 46 unprofitable stores that is expected to be completed by November 2018. The Sears and Kmart chains have 894 U.S. locations left, compared to a total of 3,500 between them when they merged in 2005.
Sears has survived the Great Depression and world wars. The fate of Sears Holdings Corp (SHLDQ.PK) highlights a harsh reality of U.S. bankruptcy - it requires armies of pricey specialists in a system driven by an outcome, not costs. On Monday, Sears will consider bids for its assets, including a last-ditch $5 billion proposal by chairman and controlling shareholder Eddie Lampert.
Amazon (AMZN) may have helped quicken the end for former retail giant Sears (SHLD), and a Whole Foods takeover of Sears store may be in the works.
Moody's Investors Service affirmed the ratings on five classes of BAMLL Commercial Mortgage Securities Trust 2013-WBRK, Commercial Mortgage Pass-Through Certificates, Series 2013-WBRK. The ratings on the five P&I classes were affirmed because the transaction's key metrics, including Moody's loan-to-value (LTV) ratio and Moody's stressed debt service coverage ratio (DSCR), are within acceptable ranges.
The rating on six principal and interest (P&I) classes were affirmed because the transaction's key metrics, including Moody's loan-to-value (LTV) ratio, Moody's stressed debt service coverage ratio (DSCR) and the transaction's Herfindahl Index (Herf), are within acceptable ranges. Moody's rating action reflects a base expected loss of 4.9% of the current balance, compared to 5.0% at Moody's last review. Moody's base expected loss plus realized losses is now 4.8% of the original pooled balance, compared to 4.9% at Moody's last review.
We've got a mixed bag in retail, while airlines remain in turbulent air. That being said, the overall market did pretty well on Thursday, considering we heard from Fed Chair Jerome Powell. He finally seems to know what to say to the markets and what not to say. With that said, let's get a look at some top stock trades for Friday. ### Macy's (M) InvestorPlace - Stock Market News, Stock Advice & Trading Tips Macy's (NYSE:M) stock made its direction pretty clear: Down. Shares are plunging almost 20% on the day after the company cut its full-year guidance and reported disappointing holiday sales results. * 10 Key Emerging-Market Stocks to Buy for Contrarian Investors Down almost 20%, bulls had a chance to defend Macy's between $26 and $27, keeping it above a pivotal level. Below this level, I want nothing to do Macy's. ### Target (TGT) Target (NYSE:TGT) shares slipped almost 4% on Thursday too, but not for the same reasons. The company reiterated its full-year outlook and reported strong holiday sales. But its CFO is stepping down. That's causing some hesitation, but it's clear that Target is resonating with shoppers. The stock is holding up over $65, a key level. So long as that remains the case, bulls can stay long and look for an eventual challenge of the $74 the $76 area. ### Costco Wholesale (COST) Shares of Costco Wholesale (NASDAQ:COST) are about flat on the day, outperforming the retail sector overall. However, after December's breakdown, the stock is still under pressure even though the recent numbers -- as usual -- are good. So what do investors do? Costco is in a "best house in a bad neighborhood" situation. At least in the short-term. Between $213 and $219, there's a decent amount of possible overhead resistance, while we have a rising wedge situation near current levels. * 10 Stocks You Can Set and Forget (Even In This Market) It's possible for COST to push through all of these levels and challenge downtrend resistance (blue line). On a pullback, a decline to $190 is technically possible, but I want to give COST a few days to see how it shakes out. I don't have a lot of confidence in a long setup right now, especially if retail remains weak. ### Bed Bath & Beyond (BBBY) Short of stocks like J.C. Penney (NYSE:JCP) and Sears (NASDAQ:SHLD), not many retailers have been worse than Bed Bath & Beyond (NYSE:BBBY). That's not stopping shares from popping 14% on the day though, after the company beat on earnings expectations and provided a better-than-expected outlook. Shares are ramming right into the backside of downtrend support (blue line). Can it push though? Maybe, after a move like this. Should shares fail to push through resistance, look to see if they hold up near $13. If they do get through resistance, look for BBBY to rally to the 200-day moving average. ### ### American Airlines (AAL) American Airlines (NYSE:AAL) took a dive earlier this month after Delta Air Lines (NYSE:DAL) issued worse-than-expected guidance. However, the stock held $30 on the downside, its lows over the past few months. Then American slashed its guidance on Thursday, sending shares lower once again. Initially back down to $30, AAL has made up roughly half the day's losses. If it can push higher, this low should hold once again. In 2018, we highlighted AAL as one of the cheapest in the industry and with some of the best growth. Even after the guidance cut, that remains true for American Airlines and may very well draw in some buyers. * 7 Stocks to Buy That Are Run By Billionaires That said, should AAL lose $30, I wouldn't want to stick around. The trend is clearly lower, but if $30 holds, bulls may be all right. That said, the news isn't great and it's hard to see what catalysts will push the industry higher in the short term. Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell. As of this writing, he did not hold a position in any of the aforementioned securities. ### More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Stocks You Can Set and Forget (Even In This Market) * 10 Virtual Assistants for the Future of Smart Homes * 7 5G Stocks to Buy as the Race for Spectrum Tightens Compare Brokers The post 5 Top Stock Trades for Friday: Trading the Retailers and Airlines appeared first on InvestorPlace.
Lampert's revised offer, whose details were first reported by Reuters on Wednesday, will be assessed by Sears during a Jan. 14 bankruptcy auction. "We believe our proposal will provide substantially more value to stakeholders than any other option, in particular a liquidation," a spokesperson for Lampert's hedge fund, ESL Investments Inc, said in a prepared statement. "(The proposal) is the best path forward for Sears, its associates and the many communities across the United States touched by Sears and Kmart stores," the statement added.
Sears on Tuesday agreed to consider a revised takeover bid from Chairman Edward Lampert, temporarily staving off a liquidation that would have spelled the end of the company. The latest attempt by Lampert follows a decade of revenue declines, hundreds of store closures, and years of deals in an attempt to turn around the company he put together in 2005 in an $11 billion deal.
Sears Holdings Corp (SHLDQ.PK) agreed on Tuesday to consider a revised takeover bid from billionaire Chairman Edward Lampert, temporarily staving off a liquidation that would have spelled the end of the 126-year-old U.S. department-store chain. Lampert's latest attempt to rescue Sears came after his previous $4.4 billion bid fell short, prompting the retailer to make liquidation preparations ahead of a bankruptcy court hearing in New York on Tuesday. An attorney for Sears told U.S. Bankruptcy Judge Robert Drain that Lampert is expected to submit a revised offer for the retailer, along with a $120 million deposit, by 4 p.m. ET (2100 GMT) on Wednesday.
It's looks like a Sears liquidation is getting ever closer. Source: Shutterstock Here's what to know about the recent possible news of a Sear's (NASDAQ:SHLD) liquidation. * It looks like Sears is rejecting the offer to save the company made by Chairman Eddie Lampert. * Lampert's offer was to use $4.4 billion to rescue the company from bankruptcy via his hedge fund ESL Investments. * The goal was to continue operating 425 stores and keep 50,000 employees on board at the company. * As a result of the rejection, it is much more likely that the company will move forward with Sears liquidation plans. * However, it is still possible that Lampert will try to fight this and stop the Sears liquidation plans. * Even if the Sears liquidation plans do come to pass, it many not mean the complete end of the company. * Several aspects of the business may continue to teardrop after the liquidation, but Sears as it is known now won't likely survive. * Reports claim that Sears is in talks with Abacus Advisory Group to help it with the liquidation process. * A Sears liquidation would bring an end to a company that has been around since 1893. * It would also mark the end of the troubled times for the company, which hasn't seen profits since 2012. * This will also have some 68,000 employees losing their jobs. * The 7 Best Stocks in the Entrepreneur Index You can follow these links to learn more about the possible Sears liquidation plans. InvestorPlace - Stock Market News, Stock Advice & Trading Tips SHLD stock was down 31% as of Tuesday afternoon. ### More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Stocks to Buy Down 20% in December * 5 Chinese Stocks to Avoid Now (But Buy Later) * 3 Big Gainers That Easily Could Be the Best Stocks to Buy As of this writing, William White did not hold a position in any of the aforementioned securities. Compare Brokers The post Potential Sears Liquidation News: 11 Things We Know appeared first on InvestorPlace.
"We are down, but not out... - SMT," Sears, via its official Twitter account (@Sears), said in reply to one of the many posts Monday morning about the 126-year-old company potentially going out of business. The optimistic tweets come ahead of a hearing on Tuesday, where Sears will ask a U.S. bankruptcy judge if it can proceed with liquidation after it failed to reach a deal on Chairman Edward Lampert's $4.4 billion takeover bid, according to people familiar with the matter. Another Twitter user opined that the retailer "had a good run I would say." Sears replied: "We would say that as well, but we are Marathon Runners, and we are still running.
Sears has lined up Closter, New Jersey-based Abacus Advisory Group LLC to sell the chain's vast inventories of tools, appliances and store fixtures should negotiations with Chairman Edward Lampert over his $4.4 billion takeover bid end unsuccessfully, the sources said. Lampert's bid to rescue Sears through an affiliate of his hedge fund, ESL Investments Inc, has fallen short so far, the sources said. The billionaire and Sears are racing to resolve the bid's sticking points before a Tuesday court date after negotiations dragged well beyond a Friday deadline, the sources said.
Lampert's bid is backed in part by $1.3 billion in financing from three different financial institutions, the spokesman for his hedge fund, ESL Investments Inc, said. It would preserve about 425 stores that Sears has yet to close, and secure the jobs of up to 50,000 workers out of the 68,000 employed by the retailer. People familiar with the matter said the financing comes from Sears' existing lenders Bank of America Corp and Citigroup Inc, as well Royal Bank of Canada, which was not previously a lender, which together agreed to provide a $950 million asset-based loan and a $350 million revolving credit line.
Ryan McQueeney and Maddy Johnson discuss the week's wild movements in the stock market and look back upon the retail industry's top stories of 2018.
The judge presiding over Sears Holdings Corp.’s bankruptcy suggested an $82.5 million bankruptcy sale didn’t follow proper procedure and may have unfairly disadvantaged investors who bought insurance on the company’s debt. Judge Robert Drain of the U.S. Bankruptcy Court in White Plains, N.Y., said at a Thursday hearing he would consider unwinding a sale of Sears intercompany notes to one of the retailer’s largest creditors, Cyrus Capital Partners LP. Under the deal, Sears disposed of $1.4 billion of these intercompany notes without authorization, the judge said, without allowing other purchasers the chance to bid.
The retailer is weighing closing to 50 to 80 more stores at the end of the year, people familiar with the situation tell CNBC. That could bring Sears' footprint closer to 400 stores. Lampert has said he wants to buy roughly 500 stores.
Rating Action: Moody's affirms twelve classes of DBUBS 2011- LC2. Global Credit Research- 21 Dec 2018. Approximately $1.2 billion of structured securities affected.
In private meetings, representatives for Sears and related businesses have repeated the message, the people said. It’s also come up in Sears public comments and former Chief Executive Officer Eddie Lampert’s Dec. 6 bid to buy the company. Robert Riecker, the retail chain’s chief financial officer, made the same point on the day of the company’s October bankruptcy filing.
A trader may not want to touch TGT stock from the long side based on Monday’s performance. The selling in TGT stock really accelerated in mid-November when the company reported earnings. As Target competes with companies like Amazon (NASDAQ:AMZN) and Walmart (NYSE:WMT), it’s costing plenty to keep up.