Sears Rights Offer Goes Out Big

Sears Holdings Corp. (NASDAQ: SHLD) today launched a rights offering in advance of the planned IPO of its Sears Hometown and Outlet stores spinoff, scheduled for next month. More than 24 million options were traded today and the price rose from an initial price of $1.69 to close at $2.12, a rise of more than 25%. The offering trades on the Nasdaq under the ticker symbol “SHOSR”.

Sears plans spinoff more than 1,230 Hometown, Outlet, and hardware stores in a public offering designed to unlock the value that management and chairman Eddie Lampert believe is hidden in the retail giant that owns Kmart and Sears stores. Further asset dispositions, including real estate sales and a portion of the company’s Sears Canada division, are not only possible but likely, especially if this first spinoff lives up to expectations.

The Hometown and Outlet stores spinoff will trade on the Nasdaq under the ticker symbol “SHOS”.

Shares of Sears closed up 7.7% today at $60.90 in a 52-week range of $28.89 to $85.90. The after-hours market has not been so kind, however. Shares are down about 4.3% in after-hours trading at $58.26.

Paul Ausick