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Sears Holdings Says Offer Is Fair; Remains Committed

By Home Furnishings Business in on February 2006 Sears Holdings said yesterday that it remains committed to its offer of C$16.86 a share for outstanding shares of Sears Canada despite a special committee recommendation that the offer be rejected.

Alan Lacy, vice chairman of Sears Holdings, said the committee is basing its recommendation on a "flawed valuation report." "

"The optimistic expectations for Sears Canada's business that form the basis for the valuation report are unrealistic and inconsistent with the increasingly competitive retail market in Canada," Lacy said.

Sears Holdings is offering to acquire any and all of the outstanding common shares of Sears Canada, other than those already held by Sears Holdings and its affiliates, for C$16.86 per share in cash. Sears Holdings currently owns about 53.8 percent of the outstanding shares of Sears Canada. The proposed deal is worth C$835 million.

Lacy said the offer price represents a full and fair price for the company.

"We have owned over 53 percent of Sears Canada for more than 20 years and, if necessary, we are comfortable continuing to own less than 100 percent," Lacy said. "On March 17, 2006, shareholders will only have two choices: either tender to the Sears Holdings offer or continue to hold shares, which we believe will thereafter trade at a significant discount to our offer."

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