Sears Canada Inc. - Press Release and Early Warning Report Filed Under National Instrument 62-103

TORONTO, Nov. 13, 2012 /CNW/ -


1. Name and address of the offeror
   









ESL Partners, L.P., a Delaware limited partnership ("Partners")
ESL Investors, L.L.C., a Delaware limited liability company ("Investors"),
SPE I Partners, LP, a Delaware limited partnership ("SPE I"),
SPE Master I, LP, a Delaware limited partnership ("SPE Master I"),
RBS Partners, L.P., a Delaware limited partnership ("RBS"),
ESL Institutional Partners, L.P., a Delaware limited partnership ("Institutional"),
RBS Investment Management, L.L.C., a Delaware limited liability company ("RBSIM"),
CRK Partners, L.L.C., a Delaware limited liability company ("CRK"),
ESL Investments, Inc., a Delaware corporation ("ESL"), and
Edward S. Lampert, a United States citizen.
   
  Partners, Investors, SPE I, SPE Master I, RBS, Institutional, RBSIM, CRK, ESL and Mr. Lampert are collectively defined as the "Offerors".
   
  The principal address of each of the Offerors is 1170 Kane Concourse, Suite 200, Bay Harbor, Florida 33154
   
2. The designation and number or principal amount of securities and the offeror's security holding percentage in the class of securities of which the offeror acquired ownership or control in the transaction or occurrence giving rise to the obligation to file the news release, and whether it was ownership or control that was acquired in those circumstances.
   
  On November 13, 2012, Sears Holdings Corporation ("Sears Holdings") is effecting a partial spin-off of shares of Sears Canada Inc. (the "Issuer") by way of a pro rata stock dividend to Sears Holdings stockholders (the "Spin-Off"). On such date, each holder of Sears Holdings' common stock will receive 0.4283 common shares of the Issuer, no par value (the "Shares"), for each share of Sears Holdings common stock held by such stockholder at the close of business on November 1, 2012 (the "Record Date").
   
  The Offerors have reported on Schedule 13D filed under the United States Securities Exchange Act of 1934, as amended (the "Exchange Act") that pursuant to the Spin-Off, they may be deemed to beneficially own Shares as set forth in the table below.

FILING
PERSON
NUMBER OF
SHARES
BENEFICIALLY
OWNED
PERCENTAGE
OF
OUTSTANDING
SHARES
SOLE
VOTING
POWER
SHARED
VOTING
POWER
SOLE
DISPOSITIVE
POWER
SHARED
DISPOSITIVE
POWER
ESL Partners,
L.P.
25,192,910 24.7% 15,140,671 0 15,140,671 10,052,239
(6)
ESL
Investors,
L.L.C.
1,061,382 1.0% 1,061,382 0 1,061,382 0
SPE I
Partners, LP
830,852 0.8% 830,852 0 830,852 0
SPE Master
I, LP
1,068,522 1.0% 1,068,522 0 1,068,522 0
RBS
Partners, L.P.
28,153,666 27.6% 18,101,427
(1)
0 18,101,427
(1)
10,052,239
(6)
ESL
Institutional
Partners, L.P.
4,381 0.0% 4,381 0 4,381 0
RBS
Investment
Management,
L.L.C.
4,381 0.0% 4,381 (2) 0 4,381 (2) 0
CRK
Partners,
L.L.C.
319 0.0% 319 0 319 0
ESL
Investments,
Inc.
28,158,366 27.6% 18,106,127
(3)
0 18,106,127
(3)
10,052,239
(6)
Edward S.
Lampert
28,158,366 27.6% 28,158,366
(4)
0 18,106,127
(5)
10,052,239
(6)

  (1) This number consists of 15,140,671 Shares held by Partners, 1,061,382 Shares held in an account established by the investment member of Investors, 830,852 Shares held by SPE I and 1,068,522 Shares held by SPE Master I. RBS is the general partner of, and may be deemed to indirectly beneficially own securities held by Partners, SPE I and SPE Master I. RBS is the manager of, and may be deemed to indirectly beneficially own securities held by, Investors.
     
  (2) This number consists of 4,381 Shares held by Institutional. RBSIM is the general partner of, and may be deemed to indirectly beneficially own securities held by, Institutional.
     
  (3) This number consists of 15,140,671 Shares held by Partners, 1,061,382 Shares held in an account established by the investment member of Investors, 830,852 Shares held by SPE I, 1,068,522 Shares held by SPE Master I, 4,381 Shares held by Institutional and 319 Shares held by CRK. ESL is the general partner of RBS, and is the sole member of CRK, and may be deemed to indirectly beneficially own securities that may be deemed to be indirectly beneficially owned by RBS and CRK. ESL is the manager of, and may be deemed to indirectly beneficially own securities that may be deemed to be indirectly beneficially owned by, RBSIM.
     
  (4) This number consists of 15,140,671 Shares held by Partners, 1,061,382 Shares held in an account established by the investment member of Investors, 830,852 Shares held by SPE I and 1,068,522 Shares held by SPE Master I, 4,381 Shares held by Institutional, 319 Shares held by CRK and 10,052,239 Shares held by Mr. Lampert. Mr. Lampert is the Chairman, Chief Executive Officer and Director of, and may be deemed to indirectly beneficially own securities that may be deemed to be indirectly beneficially owned by, ESL.
     
  (5) This number consists of 15,140,671 Shares held by Partners, 1,061,382 Shares held in an account established by the investment member of Investors, 830,852 Shares held by SPE I, 1,068,522 Shares held by SPE Master I, 4,381 Shares held by Institutional, and 319 Shares held by CRK. Mr. Lampert is the Chairman, Chief Executive Officer and Director of, and may be deemed to indirectly beneficially own securities that may be deemed to be indirectly beneficially owned by, ESL.
     
  (6) This number consists of 10,052,239 Shares held by Mr. Lampert.  Partners has entered into a Lock-Up Agreement (the "Lock-Up Agreement") with Mr. Lampert that restricts the purchase and sale of securities held by Mr. Lampert. Pursuant to the Lock-Up Agreement, Partners may be deemed to have shared dispositive power over, and to indirectly beneficially own, securities held by Mr. Lampert. RBS, ESL and Mr. Lampert may also be deemed to have shared dispositive power over such securities. A copy of the Lock-Up Agreement is being filed on SEDAR with this Early Warning Report.
     
  Each Offeror declares that neither the issuance and filing of this Press Release and Early Warning Report nor anything herein shall be construed as an admission that such person is, for the purposes of Section 13(d) or 13(g) of the Exchange Act, or any other purpose, the beneficial owner of any securities covered by this statement.
     
  Each Offeror may be deemed to be a member of a group with respect to the Issuer or securities of the Issuer for the purposes of Section 13(d) or 13(g) of the Exchange Act. Each Offeror declares that neither the issuance and filing of this Press Release and Early Warning Report nor anything herein shall be construed as an admission that such person is, for the purposes of Section 13(d) or 13(g) of the Act or any other purpose, (i) acting (or has agreed or is agreeing to act) with any other person as a partnership, limited partnership, syndicate, or other group for the purpose of acquiring, holding, or disposing of securities of the Issuer or otherwise with respect to the Issuer or any securities of the Issuer or (ii) a member of any syndicate or group with respect to the Issuer or any securities of the Issuer.
     
  For purposes of this Press Release and Early Warning Report under National Instrument 62-103, the Offerors are acquiring control of the Shares as set forth in the table above.  The Offerors collectively may be deemed for purposes of this Press Release and Early Warning Report under National Instrument 62-103 to continue to hold 51,962,392 Shares held by Sears Holdings following the Spin-Off, representing approximately 51.0% of the issued and outstanding Shares. Sears Holdings has indirect beneficial ownership and control of the 51,962,392 Shares owned by it.
     
3. The designation and number or principal amount of securities and the offeror's security holding percentage in the class of securities immediately after the transaction or occurrence giving rise to the obligation to file a news release.
     
  After giving effect to the Spin-Off noted in item 2 above, the Offerors may be deemed for purposes of this Press Release and Early Warning Report under National Instrument 62-103 to beneficially own in aggregate 80,120,758 Shares representing approximately 78.6% of the issued and outstanding Shares, which includes the Shares as set forth in the table noted in item 2 above and the Shares owned by Sears Holdings.
     
4. The designation and number or principal amount of securities and the percentage of outstanding securities of the class of securities referred to in paragraph 3 over which:
     
  (i) the offeror, either alone or together with joint actors, has ownership and control,
     
    See paragraph 2 above.
     
  (ii) the offeror, either alone or together with joint actors, has ownership but control is held by other persons or companies other than the offeror or any joint actor.
     
    Not applicable.
     
  (iii) the offeror, either alone or together with joint actors, has exclusive or shared control but does not have ownership.
     
    Not applicable.
     
5. The name of the market in which the transaction or occurrence that gave rise to the news release took place.
     
  Not applicable.
     
6. The value, in Canadian dollars, of any consideration offered per security if the offeror acquired ownership of a security in the transaction or occurrence giving rise to the obligation to file a news release.
     
  Not applicable.
     
7. The purpose of the offeror and any joint actors in effecting the transaction or occurrence that gave rise to the news release, including any future intention to acquire ownership of, or control over, additional securities of the reporting issuer.
     
  The Offerors plan to review their investment in the Issuer on a continuing basis.  Depending upon each factor discussed below and each other factor (which may be unknown at this time) that is or may become relevant, the Offerors plan to consider, among other things: (a) the acquisition by the Offerors of additional securities of the Issuer, or the disposition of securities of the Issuer; (b) an extraordinary corporate transaction, such as a merger, reorganization or liquidation, involving the Issuer or any of its subsidiaries; (c) a sale or transfer of a material amount of assets of the Issuer or any of its subsidiaries; (d) changes in the present board of directors or management of the Issuer; (e) a material change in the present capitalization or dividend policy of the Issuer; (f) any other material change in the Issuer's business or corporate structure; (g) changes in the Issuer' certificate of incorporation or bylaws or other actions which may impede the acquisition of control of the Issuer by any person; (h) causing any class of the Issuer's securities to be delisted from a national securities exchange or to cease to be authorized to be quoted in an inter-dealer quotation system of a registered national securities association; (i) a class of equity securities of the Issuer becoming eligible for termination of registration; or (j) any action similar to those enumerated above.
     
  Any open market or privately negotiated purchases or sales, acquisition recommendations or proposals or other transactions may be made at any time without prior notice.  Any alternative may depend upon a variety of factors, including, without limitation, current and anticipated future trading prices of the securities, the financial condition, results of operations and prospects of the Issuer and general industry conditions, the availability, form and terms of financing, other investment and business opportunities, general stock market and economic conditions, tax considerations and other factors.  Although the foregoing reflects plans and proposals presently contemplated by each Offeror with respect to the Issuer, the foregoing is subject to change at any time and dependent upon contingencies and assumed and speculative conditions, and there can be no assurance that any of the actions set forth above will be taken.
     
  Except as described herein or to the extent that the foregoing may be deemed to be a plan or proposal, none of the Offerors currently has any plans or proposals that relate to or would result in any of the actions specified in clause (a) through (j) above. Depending upon the foregoing factors and to the extent deemed advisable in light of their general investment policies, or other factors, the Offerors may, at any time and from time to time, formulate other purposes, plans or proposals regarding the Issuer or the Issuer's Shares, or any other actions that could involve one or more of the types of transactions or have one or more of the results described in paragraphs (a) through (j) above. The foregoing is subject to change at any time, and there can be no assurance that any of the Offerors will take any of the actions set forth above.
     
8. The general nature and the material terms of any agreement, other than lending arrangements, with respect to securities of the reporting issuer, entered into by the offeror, or any joint actor, and the issuer of the securities or any other entity in connection with the transaction or occurrence giving rise to the news release, including agreements with respect to the acquisition, holding, disposition or voting of any securities.
     
  The Lock-Up Agreement restricts the purchases and sale by Mr. Lampert of the Shares. Pursuant to the Lock-Up Agreement, Mr. Lampert generally is required to sell Shares and purchase additional Shares on a pro rata basis with the sales and purchases of Shares 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 Shares or purchases of additional Shares except in accordance with the Lock-Up Agreement.
     
  Except as otherwise described herein and in a Joint Filing Agreement entered into between the Offerors regarding the making of certain securities related filings, no Offeror has any contract, arrangement, understanding or relationship with any person with respect to the Shares of the Issuer or any other securities of the Issuer. A copy of the Joint Filing Agreement is being filed on SEDAR with this early warning report.
     
9. The names of any joint actors in connection with the disclosure required by this form.
     
  As a result of the direct or indirect deemed beneficial ownership of a majority of the outstanding shares of Sears Holdings common stock by the Offerors collectively, Sears Holdings may be deemed to be a joint actor of the Offerors.
     
10. In the case of a transaction or occurrence that did not take place on a stock exchange or other market that represents a published market for the securities, including an issuance from treasury, the nature and value of the consideration paid by the offeror.
     
  Not applicable.
     
11. If applicable, a description of any change in any material fact set out in a previous report by the entity under the early warning requirements or Part 4 in respect of the reporting issuer's securities.
     
  Not applicable.
     
12. If applicable, a description of the exemption from securities legislation being relied on by the offeror and the facts supporting that reliance.
     
  Not applicable.



 

SOURCE Sears Canada Inc.



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