Sears Unlocking Serious Value with Sears Hometown and Outlet Stores Spin-Off

Sears Holdings Corp. (NASDAQ: SHLD) is surging this morning after the Eddie Lampert-run entity has filed with the Securities and Exchange Commission to spin out the Sears Hometown and Outlet Stores, Inc. unit via a common stock and rights issuance.

ESL Investments Inc., Eddie Lampert’s investment vehicle, beneficially owns approximately 62% of the common stock of Sears Holdings, and of course it intends to exercise its subscription rights in full.

As of April 28, 2012, the Sears Hometown and Hardware segment consists of 1,116 stores as follows:

• 944 Sears Hometown Stores, primarily independently owned stores
• 96 Sears Hardware Stores, neighborhood hardware stores that carry Craftsman brand tools and lawn and garden equipment, DieHard brand batteries and a wide assortment of other national brands and other home improvement products
• 76 Sears Home Appliance showrooms

As of April 28, 2012, the Sears Outlet segment consists of 122 Sears Outlet Stores.

Following the closing of this rights offering, the company will be a publicly traded company independent from Sears Holdings, which will not retain any ownership interest in the company except to the extent that the subscription rights are not exercised in full and that shares not purchased through the exercise of basic subscription rights are not purchased pursuant to the oversubscription privilege.

Shares of Sears are up by about 8% at $55.50 this Monday morning. Shares closed at $51.42 on Friday, and the 52-week range is $28.89 to $85.90

The full filing is here.

JON C. OGG