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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Sears Hometown and Outlet Stores Inc | NASDAQ:SHOS | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 3.40 | 3.50 | 3.54 | 0 | 01:00:00 |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13E-3
RULE 13e-3 TRANSACTION STATEMENT UNDER SECTION 13(e)
OF THE SECURITIES AND EXCHANGE ACT OF 1934
(Amendment No. 1)
Sears Hometown and Outlet Stores, Inc.
(Name of Issuer)
SEARS HOMETOWN AND OUTLET STORES, INC.
TRANSFORM HOLDCO LLC
TRANSFORM MERGER CORPORATION
ESL PARTNERS, L.P.
ESL INVESTMENTS, INC.
EDWARD S. LAMPERT
RBS PARTNERS, L.P.
(Names of Person(s) Filing Statement)
COMMON STOCK
(Title of Class of Securities)
812362101
(CUSIP Number of Class of Securities)
Luke J. Valentino Transform Holdco LLC 333 Beverly Road Hoffman Estates, IL 60179 (847) 286-2500 |
Charles J. Hansen Sears Hometown and Outlet Stores, Inc. 5500 Trillium Boulevard, Suite 501 Hoffman Estates, Illinois 60192 (847) 286-7000 |
(Name, address and telephone number of person authorized to receive notices and communications on behalf of filing persons)
With Copies to:
Benet J. OReilly Neil R. Markel Cleary Gottlieb Steen & Hamilton LLP One Liberty Plaza New York, New York 10006 |
Creighton OM. Condon Rory B. OHalloran Cody L. Wright Shearman & Sterling LLP 599 Lexington Avenue New York, New York 10022 |
This statement is filed in connection with (check the appropriate box):
☒ |
a. |
The filing of solicitation materials or an information statement subject to Regulation 14A, Regulation 14C or Rule 13e-3(c) under the Securities Exchange Act of 1934. | ||
☐ |
b. |
The filing of a registration statement under the Securities Act of 1933. | ||
☐ |
c. |
A tender offer. | ||
☐ |
d. |
None of the above. |
Check the following box if the soliciting materials or information statement referred to in checking box (a) are preliminary copies: ☒
Check the following box if the filing is a final amendment reporting the results of the transaction ☐
CALCULATION OF FILING FEE
Transaction Valuation* | Amount of Filing Fee** | |
$35,910,423.25 | $4,352.34 |
* |
The transaction valuation is estimated solely for purposes of calculating the filing fee. The transaction valuation was determined based upon 11,049,361 shares of common stock (being 22,702,132 shares of common stock plus 781,618 restricted stock units issued and outstanding minus 12,434,389 shares of common stock beneficially owned in the aggregate by ESL Partners, L.P. and Edward S. Lampert (which excludes 5,820 shares of common stock held by ESL Partners, L.P. in separate accounts on behalf of, and for the benefit of, redeeming limited partners of ESL Partners, L.P.) as of September 4, 2019) multiplied by the estimated maximum per share Merger Consideration of $3.25. |
** |
In accordance with Section 14(g) of the Securities Exchange Act of 1934, as amended, and Rule 0-11(c)(1) promulgated thereunder, the filing fee was determined by multiplying 0.0001212 by the aggregate merger consideration. |
☒ |
Check the box if any part of the fee is offset as provided by Rule 0-11(a)(2) and identify the filing with which the offsetting fee was previously paid. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. |
Amount previously paid: $2,797.13 | Filing Party: Sears Hometown and Outlet Stores, Inc. | |
Form or registration No.: Schedule 14C | Date Filed: July 26, 2019 | |
Amount previously paid: $1,555.21 | Filing Party: Sears Hometown and Outlet Stores, Inc. | |
Form or registration No.: Schedule 14C | Date Filed: September 4, 2019 |
INTRODUCTION
This Amendment No. 1 (this Amendment No. 1) to the Transaction Statement on Schedule 13E-3 (as amended by this Amendment No. 1, this Transaction Statement), together with the exhibits hereto, is being filed by (i) Sears Hometown and Outlet Stores, Inc., a Delaware corporation (the Company), (ii) Transform Holdco LLC, a Delaware limited liability company (Transform), (iii) Transform Merger Corporation, a Delaware corporation (Merger Subsidiary), (iv) ESL Partners, L.P., a Delaware limited partnership (Partners), (v) RBS Partners, L.P., a Delaware limited partnership (RBS), (vi) ESL Investments, Inc., a Delaware corporation (ESL Investments), and (vii) Edward S. Lampert, a United States citizen (each of (i) through (vii), a Filing Person). The Company has filed, concurrently with the filing of this Amendment No. 1, Amendment No. 1 to an information statement on Schedule 14C (as amended, the Information Statement). A copy of the Information Statement is attached hereto as Exhibit (a)(1) and a copy of the Merger Agreement (as defined below) is attached as Annex A to the Information Statement. All references in this Transaction Statement to Items numbered 1001 to 1016 are references to Items contained in Regulation M-A promulgated under the Securities Exchange Act of 1934, as amended (the Exchange Act).
This Transaction Statement relates to the Agreement and Plan of Merger, dated as of June 1, 2019 (the Merger Agreement), among the Company, Transform and Merger Subsidiary, pursuant to which Merger Subsidiary will merge with and into the Company (the Merger). Prior to completion of the Merger, the Company has been afforded an opportunity to market and sell the Companys Sears Outlet and Buddys Home Furnishing Stores businesses to a third party (an Outlet Sale). On August 27, 2019, the Company entered into an Equity and Asset Purchase Agreement (the Liberty Purchase Agreement) with Franchise Group Newco S, LLC (the Outlet Purchaser) and, solely for purposes of a performance and payment guarantee on behalf of the Outlet Purchaser, Liberty Tax, Inc., to effect an Outlet Sale to the Outlet Purchaser (the Liberty Sale). A copy of the Liberty Purchase Agreement is attached as Annex B to the Information Statement.
If the Merger is completed, each share of common stock, par value $0.01, of the Company (Company Common Stock) issued and outstanding immediately prior to the effective time of the Merger (except for shares (i) owned by the Company as treasury stock or by any subsidiary of either the Company or Transform, (ii) owned by ESL Investments or its investment affiliates, including Edward S. Lampert (together, ESL), or Transform, or (iii) held by stockholders who are entitled to demand and who properly demand appraisal under Section 262 of the General Corporation Law of the State of Delaware (the DGCL) for such shares) will be cancelled and converted automatically into the right to receive $2.25 in cash, without interest, subject to an upward adjustment (as described in more detail in the Information Statement) in the event that the Liberty Sale is completed prior to the closing of the Merger (the Merger Consideration). If the Liberty Sale is consummated prior to the closing of the Merger, it is currently estimated to result in Merger Consideration of approximately $3.25 per share of Company Common Stock, although such amount could be lower under certain circumstances, as described more fully in the Information Statement. Any payment of the Merger Consideration will be subject to any required withholding taxes.
Under Section 251 of the DGCL and the applicable provisions of the Companys Certificate of Incorporation (as amended) and Amended and Restated Bylaws, the adoption of the Merger Agreement by the Companys stockholders required the affirmative vote or written consent of the holders of a majority of the outstanding shares of Company Common Stock. On June 1, 2019, immediately following execution of the Merger Agreement, Edward S. Lampert and Partners (together, the Principal Stockholders) caused to be delivered to the Company an irrevocable written consent (the Written Consent) adopting and approving the Merger Agreement and the transactions contemplated thereby, including the Merger, and approving any Outlet Sale to the extent such Outlet Sale would constitute a sale of substantially all of the Companys property and assets and be subject to the stockholder approval requirements of Section 271(a) of the DGCL (a Section 271 Sale), in respect of 13,226,598 shares of Company Common Stock, representing approximately 58.3% of the outstanding shares of Company Common Stock entitled to act by written consent with respect to the adoption of the Merger Agreement and any Outlet Sale. Accordingly, the adoption and approval of the Merger Agreement and the transactions contemplated thereby, including the Merger, and any Outlet Sale, became effective on June 1, 2019. No further approval of the stockholders of the Company is required to adopt or approve the Merger Agreement or the transactions contemplated thereby, including the Merger, or any Outlet Sale. A copy of the Written Consent is attached as Annex D to the Information Statement and incorporated by reference hereto as Exhibit (d)(4).
In connection with the Companys entry into the Liberty Purchase Agreement, the Principal Stockholders executed and delivered to the Company an irrevocable written consent (the Liberty Consent) confirming the Principal Stockholders approval of an Outlet Sale consummated in all material respects in accordance with the terms set forth in the Liberty Purchase Agreement, to the extent such sale constitutes a Section 271 Sale, in respect of 12,535,679 shares of Company Common Stock, representing approximately 55.2% of the outstanding shares of Company Common Stock entitled to act by written consent with respect to the adoption of the Liberty Sale. A copy of the Liberty Consent is attached as Annex E to the Information Statement and incorporated by reference hereto as Exhibit (d)(6).
Pursuant to General Instruction F to Schedule 13E-3, the information in the Information Statement, including all annexes thereto, is expressly incorporated herein by reference in its entirety, and responses to each item herein are qualified in their entirety by the information contained in the Information Statement. The cross-references below are being supplied pursuant to General Instruction G to Schedule 13E-3 and show the location in the Information Statement of the information required to be included in response to the items of Schedule 13E-3. As of the date hereof, the Information Statement is in preliminary form and is subject to completion. Terms used but not defined in this Transaction Statement shall have the meanings given to them in the Information Statement.
All information contained in, or incorporated by reference into, this Transaction Statement concerning each Filing Person has been supplied by such Filing Person.
Item 1. Summary Term Sheet
Regulation M-A Item 1001
Summary Term Sheet. The information set forth under the following captions in the Information Statement is incorporated herein by reference:
Summary Term Sheet
Questions and Answers about the Merger and the Liberty Sale
Item 2. Subject Company Information
Regulation M-A Item 1002
(a) |
Name and Address. The information set forth under the following captions in the Information Statement is incorporated herein by reference: |
Summary Term SheetParties Involved in the MergerSears Hometown and Outlet Stores, Inc.
Parties Involved in the MergerSears Hometown and Outlet Stores, Inc.
Important Additional Information Regarding the CompanyAbout the Company and its Business
(b) |
Securities. The information set forth under the following captions in the Information Statement is incorporated herein by reference: |
Summary Term SheetParties Involved in the MergerSears Hometown and Outlet Stores, Inc.
Parties Involved in the MergerSears Hometown and Outlet Stores, Inc.
Important Additional Information Regarding the CompanySecurity Ownership of Certain Beneficial Owners and Management
(c)-(d) |
Trading Market and Price; Dividends. The information set forth under the following captions in the Information Statement is incorporated herein by reference: |
Summary Term SheetMarket Price of Company Common Stock and Dividend Data
2
Important Additional Information Regarding the CompanyMarket Prices and Dividend Data
(e) |
Prior Public Offerings. Not applicable. |
(f) |
Prior Stock Purchases. On November 8, 2017, Mr. Lampert acquired 219,989 shares of Company Common Stock for an aggregate purchase price of $329,983.50 (excluding commissions) or approximately $1.50 per share on average, using personal funds. On December 8, 2017, Mr. Lampert acquired 95,156 shares of Company Common Stock for an aggregate purchase price of $137,976.20 (excluding commissions) or approximately $1.45 per share on average, using personal funds. |
Item 3. Identity and Background of Filing Persons
Regulation M-A Item 1003
(a)-(b) |
Name and Address; Business and Background of Entities. The information set forth under the following captions in the Information Statement is incorporated herein by reference: |
Summary Term SheetParties Involved in the Merger
Parties Involved in the Merger
Important Additional Information Regarding the CompanyAbout the Company and its Business
Important Additional Information Regarding the CompanyDirectors and Executive Officers
Important Additional Information Regarding the ESL Filing PartiesInformation on Entities
Important Additional Information Regarding the ESL Filing PartiesInformation on Natural Persons
(c) |
Business and Background of Natural Persons. The information set forth under the following captions in the Information Statement is incorporated herein by reference: |
Important Additional Information Regarding the CompanyDirectors and Executive Officers
Important Additional Information Regarding the ESL Filing PartiesInformation on Natural Persons
Item 4. Terms of the Transaction
Regulation M-A Item 1004
(a) |
Material Terms. The information set forth under the following captions in the Information Statement is incorporated herein by reference: |
Summary Term Sheet
Questions and Answers about the Merger and the Liberty Sale
Special FactorsRecommendation of the Special Committee and Reasons for Recommendation
Special FactorsRecommendation of the Board of Directors and Reasons for Recommendation
Special FactorsPosition of ESL on the Fairness of the Merger
Special FactorsPurposes and Reasons of the Company in Connection With the Merger
Special FactorsPurposes and Reasons of the ESL Filing Parties in Connection With the Merger
Special FactorsCertain Effects of the Merger
3
Special FactorsMaterial U.S. Federal Income Tax Consequences of the Merger
Special FactorsAnticipated Accounting Treatment of the Merger
The Merger Agreement
Annex A: Merger Agreement
Annex F: Liberty Sale Letter Agreement
(c) |
Different Terms. The information set forth under the following captions in the Information Statement is incorporated herein by reference: |
Summary Term SheetInterests of Directors and Executive Officers in the Merger
Summary Term SheetMerger Consideration
Summary Term SheetTreatment of the Companys Equity Awards and Other Incentive Compensation
Questions and Answers about the Merger and the Liberty Sale
Special FactorsCertain Effects of the Merger
Special FactorsInterests of Directors and Executive Officers in the Merger
The Merger AgreementThe Merger Consideration
The Merger AgreementTreatment of the Companys Equity Awards and Other Incentive Compensation
The Merger AgreementOther Covenants and Agreements
Annex A: Merger Agreement
Annex F: Liberty Sale Letter Agreement
(d) |
Appraisal Rights. The information set forth under the following captions in the Information Statement is incorporated herein by reference: |
Summary Term SheetAppraisal Rights
Questions and Answers about the Merger and the Liberty Sale
The Merger AgreementMerger Consideration
The Merger AgreementEffect of the Merger on Company Common Stock
The Merger AgreementAppraisal Rights
Appraisal Rights
Annex H: Section 262 of the General Corporation Law of the State of Delaware
(e) |
Provisions for Unaffiliated Security Holders. None |
(f) |
Eligibility for Trading. Not applicable. |
4
Item 5. Past Contacts, Transactions, Negotiations and Agreements.
Regulation M-A Item 1005
(a) |
Transactions. The information set forth under the following captions in the Information Statement is incorporated herein by reference: |
Special FactorsBackground of the Transaction
Important Additional Information Regarding the CompanyRelationships and Transactions with Related Persons
(b)-(c) |
Significant Corporate Events; Negotiations or Contacts. The information set forth under the following captions in the Information Statement is incorporated herein by reference: |
Summary Term SheetThe Merger
Summary Term SheetESL Letter Agreement
Summary Term SheetThe Written Consents of Stockholders
Summary Term SheetSource and Amount of Funds
Questions and Answers about the Merger and the Liberty Sale
Special FactorsBackground of the Transaction
Special FactorsRecommendation of the Special Committee and Reasons for Recommendation
Special FactorsRecommendation of the Board of Directors and Reasons for Recommendation
Special FactorsAlternatives to the Merger
The Merger Agreement
Annex A: Merger Agreement
Annex C: ESL Letter Agreement
Annex D: Written Consent
Annex E: Liberty Consent
Annex F: Liberty Sale Letter Agreement
(e) |
Agreements Involving the Subject Companys Securities. Mr. Lampert entered into a letter agreement with Partners, dated as of June 2, 2010 (the Lock-Up Agreement), that restricts the purchases and sales by Mr. Lampert of certain securities of the Company. Pursuant to the Lock-Up Agreement, Mr. Lampert generally is required to sell securities of the Company and purchase additional securities of the Company on a pro rata basis with the sales and purchases of securities of the Company made by Partners, and generally must make such sales and purchases on substantially the same terms and conditions as Partners (subject to certain legal, tax, accounting or regulatory considerations). Mr. Lampert is also restricted from certain sales of securities of the Company or purchases of additional securities of the Company except in accordance with the Lock-Up Agreement. The foregoing summary of the Lock-Up Agreement does not purport to be complete and is qualified in its entirety by reference to the Lock-Up Agreement, which is set forth as Exhibit (d)(5) hereto and is incorporated herein by reference. In addition, the information set forth under the following captions in the Information Statement is incorporated herein by reference: |
Special FactorsInterests of Directors and Executive Officers in the Merger
5
The Merger Agreement
Important Additional Information Regarding the CompanySecurity Ownership of Certain Beneficial Owners and Management
Annex A: Merger Agreement
Annex C: ESL Letter Agreement
Annex F: Liberty Sale Letter Agreement
Item 6. Purpose of the Transaction and Plans or Proposals
Regulation M-A Item 1006
(b) |
Use of Securities Acquired. The information set forth under the following captions in the Information Statement is incorporated herein by reference: |
Special FactorsCertain Effects of the Merger
The Merger AgreementMerger Consideration
The Merger AgreementEffect of the Merger on Company Common Stock
Annex A: Merger Agreement
(c)(1)-(8) Plans. |
The information set forth under the following captions in the Information Statement is incorporated herein by reference: |
Summary Term Sheet
Questions and Answers about the Merger and the Liberty Sale
Special FactorsBackground of the Transaction
Special FactorsRecommendation of the Special Committee and Reasons for Recommendation
Special FactorsRecommendation of the Board of Directors and Reasons for Recommendation
Special FactorsPurposes and Reasons of the Company in Connection With the Merger
Special FactorsPurposes and Reasons of the ESL Filing Parties in Connection With the Merger
Special FactorsPlans for the Company in Connection With the Merger
Special FactorsAlternatives to the Merger
Special FactorsCertain Effects of the Merger
Special FactorsSource and Amount of Funds
Special FactorsInterests of Directors and Executive Officers in the Merger
Special FactorsDe-listing and De-registration of Company Common Stock
The Merger Agreement
Important Additional Information Regarding the CompanyMarket Prices and Dividend Data
Annex A: Merger Agreement
6
Item 7. Purposes, Alternatives, Reasons and Effects
Regulation M-A Item 1013
(a) |
Purposes. The information set forth under the following captions in the Information Statement is incorporated herein by reference: |
Special FactorsBackground of the Transaction
Special FactorsPurposes and Reasons of the Company in Connection With the Merger
Special FactorsPurposes and Reasons of the ESL Filing Parties in Connection With the Merger
Special FactorsPlans for the Company in Connection With the Merger
Special FactorsCertain Effects of the Merger
(b) |
Alternatives. The information set forth under the following captions in the Information Statement is incorporated herein by reference: |
Special FactorsBackground of the Transaction
Special FactorsRecommendation of the Special Committee and Reasons for Recommendation
Special FactorsRecommendation of the Board of Directors and Reasons for Recommendation
Special FactorsPosition of the Company on the Fairness of the Merger
Special FactorsPosition of ESL on the Fairness of the Merger
Special FactorsPurposes and Reasons of the Company in Connection With the Merger
Special FactorsPurposes and Reasons of the ESL Filing Parties in Connection With the Merger
Special FactorsAlternatives to the Merger
(c) |
Reasons. The information set forth under the following captions in the Information Statement is incorporated herein by reference: |
Summary Term SheetThe Merger
Summary Term SheetRecommendation of the Special Committee
Summary Term SheetRecommendation of the Board of Directors
Special FactorsBackground of the Transaction
Special FactorsRecommendation of the Special Committee and Reasons for Recommendation
Special FactorsRecommendation of the Board of Directors and Reasons for Recommendation
Special FactorsPosition of the Company on the Fairness of the Merger
Special FactorsPosition of ESL on the Fairness of the Merger
Special FactorsPurposes and Reasons of the Company in Connection With the Merger
Special FactorsPurposes and Reasons of the ESL Filing Parties in Connection With the Merger
Special FactorsAlternatives to the Merger
7
(d) |
Effects. The information set forth under the following captions in the Information Statement is incorporated herein by reference: |
Summary Term SheetThe Merger
Summary Term SheetMerger Consideration
Summary Term SheetInterests of Directors and Executive Officers in the Merger
Summary Term SheetTreatment of the Companys Equity Awards and Other Incentive Compensation
Summary Term SheetMaterial U.S. Federal Income Tax Consequences of the Merger
Summary Term SheetDe-listing and De-registration of Company Common Stock
Questions and Answers about the Merger and the Liberty Sale
Special FactorsBackground of the Transaction
Special FactorsPurposes and Reasons of the ESL Filing Parties in Connection With the Merger
Special FactorsPlans for the Company in Connection With the Merger
Special FactorsCertain Effects of the Merger
Special FactorsInterests of Directors and Executive Officers in the Merger
Special FactorsMaterial U.S. Federal Income Tax Consequences of the Merger
The Merger AgreementThe Merger
The Merger AgreementMerger Consideration
The Merger AgreementCertificate of Incorporation; Bylaws; Directors and Officers
The Merger AgreementEffect of the Merger on Company Common Stock
The Merger AgreementPayment Procedures
The Merger AgreementTreatment of the Companys Equity Awards and Other Incentive Compensation
The Merger AgreementConduct of Business Pending the Merger
The Merger AgreementOther Covenants and Agreements
Annex A: Merger Agreement
Item 8. Fairness of the Transaction
Regulation M-A Item 1014
(a)-(b) |
Fairness; Factors Considered in Determining Fairness. The information set forth under the following captions in the Information Statement is incorporated herein by reference: |
Summary Term SheetRecommendation of the Special Committee
Summary Term SheetRecommendation of the Board of Directors
Summary Term SheetOpinion of PJ Solomon
8
Special FactorsBackground of the Transaction
Special FactorsRecommendation of the Special Committee and Reasons for Recommendation
Special FactorsRecommendation of the Board of Directors and Reasons for Recommendation
Special FactorsOpinion of PJ Solomon
Special FactorsPosition of the Company on the Fairness of the Merger
Special FactorsPosition of ESL on the Fairness of the Merger
Special FactorsPurposes and Reasons of the Company in Connection With the Merger
Special FactorsPurposes and Reasons of the ESL Filing Parties in Connection With the Merger
Special FactorsInterests of Directors and Executive Officers in the Merger
Annex G: PJ Solomon Opinion
(c) |
Approval of Security Holders. The information set forth under the following captions in the Information Statement is incorporated herein by reference: |
Summary Term SheetThe Written Consents of Stockholders
Questions and Answers about the Merger and the Liberty Sale
Special FactorsBackground of the Transaction
Special FactorsPosition of the Company on the Fairness of the Merger
(d) |
Unaffiliated Representative. The information set forth under the following captions in the Information Statement is incorporated herein by reference: |
Summary Term SheetRecommendation of the Special Committee
Summary Term SheetOpinion of PJ Solomon
Special FactorsBackground of the Transaction
Special FactorsRecommendation of the Special Committee and Reasons for Recommendation
Special FactorsOpinion of PJ Solomon
Special FactorsPosition of the Company on the Fairness of the Merger
Annex G: PJ Solomon Opinion
(e) |
Approval of Directors. The information set forth under the following captions in the Information Statement is incorporated herein by reference: |
Summary Term SheetRecommendation of the Special Committee
Summary Term SheetRecommendation of the Board of Directors
Special FactorsBackground of the Transaction
Special FactorsRecommendation of the Special Committee and Reasons for Recommendation
Special FactorsRecommendation of the Board of Directors and Reasons for Recommendation
9
(f) |
Other Offers. The information set forth under the following captions in the Information Statement is incorporated herein by reference: |
Special FactorsBackground of the Transaction
Special FactorsRecommendation of the Special Committee and Reasons for Recommendation
Special FactorsRecommendation of the Board of Directors and Reasons for Recommendation
Special FactorsPosition of the Company on the Fairness of the Merger
Special FactorsPosition of ESL on the Fairness of the Merger
Special FactorsPurposes and Reasons of the ESL Filing Parties in Connection With the Merger
Special FactorsAlternatives to the Merger
Item 9. Reports, Opinions, Appraisals and Certain Negotiations
Regulation M-A Item 1015
(a)-(b) |
Report, Opinion or Appraisal; Preparer and Summary of the Report, Opinion or Appraisal. The opinion prepared by PJ Solomon and provided to the Special Committee and the Board of Directors, dated May 31, 2019, is attached as Annex G to the Information Statement and incorporated herein by reference. The discussion and/or presentation materials prepared by PJ Solomon and provided to the Special Committee and, in certain instances, the Board of Directors, dated February 5, 2019, April 6, 2019, April 8, 2019, April 23, 2019, April 24, 2019, May 1, 2019, May 2, 2019, May 9, 2019, May 10, 2019, May 26, 2019, May 27, 2019, May 31, 2019, May 31, 2019 and August 25, 2019 are set forth as Exhibits (c)(2) (c)(15), respectively, hereto and are incorporated herein by reference. In addition, the information set forth under the following captions in the Information Statement is incorporated herein by reference: |
Summary Term SheetOpinion of PJ Solomon
Special FactorsBackground of the Transaction
Special FactorsRecommendation of the Special Committee and Reasons for Recommendation
Special FactorsRecommendation of the Board of Directors and Reasons for Recommendation
Special FactorsUnaudited Projected Financial Information of the Company
Special FactorsOpinion of PJ Solomon
Special FactorsPosition of the Company on the Fairness of the Merger
Special FactorsPosition of ESL on the Fairness of the Merger
Special FactorsFees and Expenses
Annex G: PJ Solomon Opinion
(c) |
Availability of Documents. The reports, opinions or appraisals referenced in this Item 9 are filed herewith or incorporated by reference herein and will be made available for inspection and copying at the principal executive offices of the Company during its regular business hours by any interested holder of Company Common Stock or representative who has been so designated in writing. |
10
Item 10. Source and Amount of Funds or Other Consideration
Regulation M-A Item 1007
(a)-(b) |
Source of Funds; Conditions. Concurrently with the execution of the Merger Agreement, ESL Investments Inc. executed a commitment letter (the Equity Commitment Letter) with Transform pursuant to which it committed to contribute, or cause to be contributed, approximately $21,000,000 to Transform (subject to the terms and conditions set forth in the Equity Commitment Letter) to be used by Transform to pay the Merger Consideration. A copy of the Equity Commitment Letter is set forth as Exhibit (d)(2) hereto and is incorporated herein by reference. In addition, the information set forth under the following captions in the Information Statement is incorporated herein by reference: |
Summary Term SheetSource and Amount of Funds
Special FactorsBackground of the Transaction
Special FactorsSource and Amount of Funds
(c) |
Expenses. The information set forth under the following captions in the Information Statement is incorporated herein by reference: |
Summary Term SheetExpenses
Special FactorsFees and Expenses
The Merger AgreementExpenses
(d) |
Borrowed Funds. The information set forth under the following captions in the Information Statement is incorporated herein by reference: |
Special FactorsSource and Amount of Funds
Item 11. Interest in Securities of the Subject Company
Regulation M-A Item 1008
(a) |
Securities Ownership. The information set forth under the following captions in the Information Statement is incorporated herein by reference: |
Summary Term SheetInterests of Directors and Executive Officers in the Merger
Special FactorsInterests of Directors and Executive Officers in the Merger
Important Additional Information Regarding the CompanySecurity Ownership of Certain Beneficial Owners and Management
(b) Securities Transactions. The information set forth under the following captions in the Information Statement is incorporated herein by reference:
Important Additional Information Regarding the CompanySecurities Transactions
Item 12. The Solicitation or Recommendation
Regulation M-A Item 1012
(d)-(e) |
Intent to Tender or Vote in a Going-Private Transaction; Recommendations of Others. The information set forth under the following captions in the Information Statement is incorporated herein by reference: |
Summary Term SheetThe Written Consents of Stockholders
Special FactorsBackground of the Transaction
Special FactorsRecommendation of the Special Committee and Reasons for Recommendation
Special FactorsRecommendation of the Board of Directors and Reasons for Recommendation
Special FactorsInterests of Directors and Executive Officers in the Merger
Annex D: Written Consent
Annex E: Liberty Consent
Item 13. Financial Statements
Regulation M-A Item 1010
(a) |
Financial Information. The information set forth under the following captions in the Information Statement is incorporated herein by reference: |
Special FactorsUnaudited Projected Financial Information of the Company
Important Additional Information Regarding the CompanyHistorical Consolidated Financial Information
Where You Can Find Additional Information
12
The Companys audited consolidated financial statements for the fiscal years ended February 2, 2019 and February 3, 2018, and the notes thereto, contained in the Companys Annual Report on Form 10-K for the fiscal year ended February 2, 2019, and the Companys unaudited financial statements for the three-month period ended May 4, 2019, and the notes thereto, contained in the Companys Quarterly Report on Form 10-Q for the three months ended May 4, 2019, are incorporated herein by reference.
(b) |
Pro Forma Information. Not applicable. |
Item 14. Persons/Assets, Retained, Employed, Compensated or Used
Regulation M-A Item 1009
(a)-(b) |
Solicitations or Recommendations; Employees and Corporate Assets. The information set forth under the following captions in the Information Statement is incorporated herein by reference: |
Summary Term SheetRecommendation of the Special Committee
Summary Term SheetRecommendation of the Board of Directors
Questions and Answers about the Merger and the Liberty Sale
Special FactorsBackground of the Transaction
Special FactorsRecommendation of the Special Committee and Reasons for Recommendation
Special FactorsRecommendation of the Board of Directors and Reasons for Recommendation
Special FactorsPosition of the Company on the Fairness of the Merger
Special FactorsInterests of Directors and Executive Officers in the Merger
Special FactorsFees and Expenses
Item 15. Additional Information
Regulation M-A Item 1011
(b) |
Golden Parachute Compensation. The information set forth under the following caption in the Information Statement is incorporated herein by reference: |
Special FactorsInterests of Directors and Executive Officers in the Merger
(c) |
Other Material Information. The information set forth in the Information Statement, including all annexes thereto, is incorporated herein by reference. |
Item 16. Exhibits
Regulation M-A Item 1016
Exhibit
No. |
Description |
|
(a)(1) | Amendment No. 1 to the Information Statement on Schedule 14C filed by Sears Hometown and Outlet Stores, Inc. with the SEC on September 4, 2019 and incorporated herein by reference to such filing. |
13
Exhibit
No. |
Description |
|
(a)(2) | Press release issued by Sears Hometown and Outlet Stores, Inc., dated June 3, 2019 (incorporated by reference to Exhibit 99.2 to the Current Report on Form 8-K filed by Sears Hometown and Outlet Stores, Inc. on June 3, 2019). | |
(b) | Not applicable. | |
(c)(1) | Opinion of PJ Solomon to the Special Committee and the Board of Directors of Sears Hometown and Outlet Stores Inc., dated May 31, 2019 (included as Annex G to the Information Statement and incorporated by reference herein as Exhibit (c)(1)). | |
(c)(2) | Valuation discussion materials prepared by PJ Solomon, dated February 5, 2019, for the Special Committee of Sears Hometown and Outlet Stores, Inc. | |
(c)(3) | Discussion materials prepared by PJ Solomon, dated April 6, 2019, for the Special Committee of Sears Hometown and Outlet Stores, Inc. | |
(c)(4) | Transaction analysis prepared by PJ Solomon, dated April 8, 2019, for the Special Committee of Sears Hometown and Outlet Stores, Inc. | |
(c)(5) | Valuation summary prepared by PJ Solomon, dated April 23, 2019, for the Special Committee of Sears Hometown and Outlet Stores, Inc. | |
(c)(6) | Share price analysis prepared by PJ Solomon, dated April 24, 2019, for the Special Committee of Sears Hometown and Outlet Stores, Inc. | |
(c)(7) | Preliminary valuation materials prepared by PJ Solomon, dated May 1, 2019, for the Special Committee of Sears Hometown and Outlet Stores, Inc. | |
(c)(8) | Discussion materials prepared by PJ Solomon, dated May 2, 2019, for the Special Committee of Sears Hometown and Outlet Stores, Inc. | |
(c)(9) | Preliminary valuation materials prepared by PJ Solomon, dated May 9, 2019, for the Special Committee of Sears Hometown and Outlet Stores, Inc. | |
(c)(10) | Preliminary valuation materials prepared by PJ Solomon, dated May 10, 2019, for the Special Committee of Sears Hometown and Outlet Stores, Inc. | |
(c)(11) | Preliminary valuation materials prepared by PJ Solomon, dated May 26, 2019, for the Special Committee and the Board of Directors of Sears Hometown and Outlet Stores, Inc. | |
(c)(12) | Discussion materials prepared by PJ Solomon, dated May 27, 2019, for the Special Committee and the Board of Directors of Sears Hometown and Outlet Stores, Inc. | |
(c)(13) | Valuation materials prepared by PJ Solomon, dated May 31, 2019, for the Special Committee and the Board of Directors of Sears Hometown and Outlet Stores, Inc. | |
(c)(14) | Discussion materials prepared by PJ Solomon, dated May 31, 2019, for the Special Committee and the Board of Directors of Sears Hometown and Outlet Stores, Inc. |
14
Exhibit
No. |
Description |
|
(c)(15) | Discussion materials prepared by PJ Solomon, dated August 25, 2019, for the Special Committee and the Board of Directors of Sears Hometown and Outlet Stores, Inc. | |
(d)(1) | Agreement and Plan of Merger, dated as of June 1, 2019, among Sears Hometown and Outlet Stores, Inc., Transform Holdco LLC and Transform Merger Corporation (included as Annex A to the Information Statement and incorporated by reference herein as Exhibit (d)(1)). | |
(d)(2) | Equity Commitment Letter, dated as of June 1, 2019, entered into by ESL Investments, Inc. in favor of Transform Holdco LLC. | |
(d)(3) | Letter Agreement, dated June 1, 2019, by and between Edward S. Lampert and Sears Hometown and Outlet Stores, Inc. (included as Annex C to the Information Statement and incorporated by reference herein as Exhibit (d)(3)). | |
(d)(4) | Action by Written Consent of ESL Partners, L.P. and Edward S. Lampert, dated June 1, 2019 (included as Annex D to the Information Statement and incorporated by reference herein as Exhibit (d)(4)). | |
(d)(5) | Lock-Up Agreement, dated June 2, 2010, by and between ESL Partners, L.P. and Edward S. Lampert (incorporated by reference to Exhibit 99.2 to the Statement on Schedule 13D with respect to the common stock of the Company filed by ESL Partners, L.P., ESL Investors, L.L.C., SPE I Partners, LP, SPE Master I, LP, RBS Partners, L.P., ESL Institutional Partners, L.P., RBS Investment Management, L.L.C., CRK Partners, L.L.C., ESL Investments, Inc. and Edward S. Lampert with the SEC on September 12, 2012). | |
(d)(6) | Action by Written Consent of ESL Partners, L.P. and Edward S. Lampert, dated August 27, 2019 (included as Annex E to the Information Statement and incorporated by reference herein as Exhibit (d)(6)). | |
(d)(7) | Letter Agreement, dated August 27, 2019, among Sears Hometown and Outlet Stores, Inc., Transform Holdco LLC and Transform Merger Corporation (included as Annex F to the Information Statement and incorporated by reference herein as Exhibit (d)(7)). | |
(f)(1) | Rights of Appraisal, incorporated herein by reference to the section titled Appraisal Rights in the Information Statement. | |
(f)(2) | Delaware Code Title 8 § 262 (included as Annex H to the Information Statement and incorporated by reference herein as Exhibit (f)(2)). |
15
SIGNATURES
After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.
Dated: September 4, 2019 |
SEARS HOMETOWN AND OUTLET STORES, INC. |
|||||
By: | /s/ Charles J. Hansen | |||||
Name: | Charles J. Hansen | |||||
Title: |
Vice President, General Counsel, and Secretary |
|||||
Dated: September 4, 2019 |
TRANSFORM HOLDCO LLC |
|||||
By: | /s/ Edward S. Lampert | |||||
Name: |
Edward S. Lampert |
|||||
Title: |
Chief Executive Officer |
|||||
Dated: September 4, 2019 |
TRANSFORM MERGER CORPORATION |
|||||
By: | /s/ Kunal S. Kamlani | |||||
Name: |
Kunal S. Kamlani |
|||||
Title: |
President |
|||||
Dated: September 4, 2019 |
ESL PARTNERS, L.P. |
|||||
By: | RBS Partners, L.P., as its general partner | |||||
By: | ESL Investments, Inc., as its general partner | |||||
By: | /s/ Edward S. Lampert | |||||
Name: | Edward S. Lampert | |||||
Title: | Chief Executive Officer | |||||
Dated: September 4, 2019 |
RBS PARTNERS, L.P. |
|||||
By: | ESL Investments, Inc., as its general partner | |||||
By: | /s/ Edward S. Lampert | |||||
Name: |
Edward S. Lampert |
|||||
Title: |
Chief Executive Officer |
|||||
Dated: September 4, 2019 |
ESL INVESTMENTS, INC. |
|||||
By: | /s/ Edward S. Lampert | |||||
Name: | Edward S. Lampert | |||||
Title: | Chief Executive Officer | |||||
Dated: September 4, 2019 | EDWARD S. LAMPERT | |||||
/s/ Edward S. Lampert |
16
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