Two groups of major U.S. shareholders in Sears Canada have hired legal counsel to explore possible deals with the struggling retailer as it undergoes a court-supervised restructuring. File photo by THE CANADIAN PRESS

Sears Canada’s big shareholders form alliance

TORONTO — Two groups of major U.S. shareholders in Sears Canada have hired legal counsel to explore possible deals with the struggling retailer as it undergoes a court-supervised restructuring.

ESL Partners LP and entities affiliated with its principal shareholder, Edward S. Lampert, announced Monday that it is working with Fairholme Capital Management on potential proposals to make to Sears Canada.

ESL and Lampert currently own 45.3 per cent of common shares in Sears Canada and Fairholme owns about 20.8 per cent of Sears Canada’s shares as of early May — a total of about two-thirds of the company’s total common stock.

However, under a court-supervised restructuring, shareholders are ranked lower than most creditors and major decisions must be approved by the presiding judge.

ESL and Fairholme, both based in Florida, say they are considering a potential negotiated transaction with Sears Canada and its subsidiaries and may work together or independently to considering financing, purchase and sales or restructuring deals.

ESL says there’s no assurance it will pursue any proposal or that such a proposal would result in a transaction, or that Fairholme will participate.

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