UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT
TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
April 13, 2015
Date of Report (Date of Earliest Event Reported)
SEARS
HOLDINGS CORPORATION
(Exact Name of Registrant as Specified in Its Charter)
Delaware
(State or Other
Jurisdiction of Incorporation)
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000-51217, 001-36693 |
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20-1920798 |
(Commission
File Number) |
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(I.R.S. Employer
Identification No.) |
3333 Beverly Road
Hoffman Estates, Illinois 60179
(Address Of Principal Executive Offices, including Zip Code)
Registrants Telephone Number, Including Area Code: (847) 286-2500
Not Applicable
(Former
Name or Former Address, If Changed Since Last Report)
Check the appropriate box below
if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
On April 13, 2015, Sears Holdings Corporation (Sears Holdings) issued a
press release announcing a joint venture between Sears Holdings and Simon Property Group. The press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.
Private Securities Litigation Reform Act of 1995
A Caution Concerning Forward-Looking Statements
This Form 8-K contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements about the
joint venture, and certain terms and expectations regarding the joint venture. The Registrant cautions that these forward-looking statements are subject to risks, uncertainties and assumptions, many of which are beyond its control, that may cause
actual results to differ materially from those indicated in the forward-looking statements for a number of reasons, including, without limitation, risks and uncertainties relating to the joint venture. Additional information concerning other factors
is contained in the Registrants annual report on Form 10-K for the fiscal year ended January 31, 2015 and subsequent filings with the SEC. The Registrant intends the forward looking statements to speak only as of the time made and, except
as required by law, do not undertake to update or revise them as more information becomes available.
Item 9.01 |
Financial Statements and Exhibits |
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Exhibit 99.1 |
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Press Release, dated April 13, 2015 |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
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SEARS HOLDINGS CORPORATION |
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Dated: April 13, 2015 |
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/s/ Robert A. Riecker |
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By: |
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Robert A. Riecker |
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Vice President, Controller and Chief Accounting Officer |
EXHIBIT INDEX
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Exhibit 99.1 |
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Press Release, dated April 13, 2015 |
Exhibit 99.1
NEWS MEDIA CONTACT:
Sears
Holdings Public Relations
(847) 286-8371
Simon Property Group
Tom Ward
(317) 685-7330
FOR IMMEDIATE
RELEASE:
April 13, 2015
Sears Holdings and Simon Property Group, Inc. Form a 50/50 Joint Venture to Unlock Real Estate Value at 10 Sears Holdings Properties at
Simon Malls
HOFFMAN ESTATES, Ill. and INDIANAPOLIS, Ind., APRIL 13, 2015 Sears Holdings Corporation (NASDAQ: SHLD) (Sears
Holdings) and Simon Property Group, Inc. (NYSE: SPG) (Simon) announced that they have created a joint venture (the JV) as part of Sears Holdings continued efforts to unlock the value of its extensive portfolio of
real estate holdings.
Sears Holdings has contributed 10 properties located at Simon malls to the JV, including property leased to outside parties. Sears
Holdings will lease back from the JV and will continue to operate existing Sears Holdings stores at the properties contributed to the JV. Simon has contributed cash to the JV, and the lease arrangements between Sears Holdings and the JV provide the
JV with the ability to create additional value through re-developing the contributed properties and re-leasing space at each property to third-party tenants.
We are pleased to reach this agreement with Simon Property Group, which is an important step in Sears Holdings continued transformation to a
membership company, without the significant asset intensity of its traditional retail business, said Edward S. Lampert, Chairman and CEO of Sears Holdings. This transaction, taken together with our other initiatives to create shareholder
value through our vast real estate portfolio, enhances Sears Holdings financial flexibility to invest in longer-term strategies such as our membership and integrated retail platforms. Sears Holdings will continue to operate these 10 stores and
there will be minimal impact on their day-to-day operations or the overall shopping experience for our members.
David Simon, Chairman and CEO of
Simon Property Group, stated The creation of this joint venture represents an exciting new chapter in our long and successful relationship with Sears Holdings. This is a natural, forward-thinking partnership that will also offer us the ability
to potentially redevelop certain locations that will create value for our customers and investors.
Transaction Structure
The transaction values the properties contributed to the JV at $228 million in total. In exchange for $114 million and a 50% interest in the JV, Sears Holdings
has contributed 10 of its properties located at Simon malls to the JV. Simon contributed cash in the amount of $114 million in exchange for its 50% interest in the JV, which was then distributed to Sears Holdings in accordance with the terms of the
agreement between the parties. In addition to the JV transaction, Simon has separately agreed to acquire a Sears Holdings property at the La Plaza Mall in McAllen, Texas.
Proposed Relationship with Seritage Growth Properties
On
April 1, 2015, Seritage Growth Properties (Seritage), a real estate investment trust formed by Sears Holdings, filed a registration statement on Form S-11 with the Securities and Exchange Commission, providing for a planned
distribution of subscription rights to purchase Seritage shares to Sears Holdings stockholders. Shortly following the consummation of the rights offering, Sears Holdings expects Seritage to purchase its 50% JV interest for a price equal to that paid
by Simon for its JV interest. Simon has also agreed to invest about $33 million in Seritage common shares through a private placement, at a purchase price equal to the subscription price of the rights offering (subject to the completion of the
rights offering and other conditions).
Other Terms
The JV will lease back existing stores to Sears Holdings under a triple-net master lease agreement (the Master Lease), which has a ten year initial
term and two five-year renewal options. Sears Holdings expects to pay initial base rent of $13.4 million under the Master Lease.
Pursuant to the terms of
the Master Lease, the JV is provided the ability to re-capture a specified portion of the space leased to Sears Holdings. Following such recapture, the JV will be able to re-lease this space to other parties at potentially higher rents. The
recapture provisions and termination rights within the Master Lease will enable Sears Holdings to continue its transformation strategy into a more asset-light retailer with less dependence on physical store locations, and will allow the JV to create
additional value through re-development.
Sears Holdings and Simon will have equal representation on the executive committee that will govern the JV.
Forward-Looking Statements
Sears Holdings Corporation
This press release contains forward-looking statements, which are based on the current beliefs and expectations of our management and are subject to
significant risks, assumptions and uncertainties that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by these forward-looking statements.
For a discussion of such risks, assumptions and uncertainties, see Risk Factors and the forward-looking statement disclosure contained in our most recent Annual Report on Form 10-K and other filings filed with the Securities and Exchange
Commission. While we believe that our forecasts and assumptions are reasonable, we caution that actual results may differ materially. We intend the forward-looking statements to speak only as of the time made and do not undertake to update or revise
them as more information becomes available, except as required by law.
Simon Property Group
Certain statements made in this press release may be deemed forward-looking statements within the meaning
of the Private Securities Litigation Reform Act of 1995. Although Simon believes the expectations reflected in any forward-looking statements are based on reasonable assumptions, Simon can give no assurance
that its expectations will be attained, and it is possible that actual results may differ materially from those indicated by these forward-looking statements due to a variety of risks, uncertainties and other
factors. Such factors include, but are not limited to: Simons ability to meet debt service requirements, the availability and terms of financing, changes in Simons credit rating, changes in market rates of interest and foreign exchange
rates for foreign currencies, changes in value of investments in foreign entities, the ability to hedge interest rate and currency risk, risks associated with the acquisition, development, expansion, leasing and management of properties, general
risks related to retail real estate, the liquidity of real estate investments, environmental liabilities, international, national, regional and local economic conditions, changes in market rental rates, security breaches that could compromise our
information technology or infrastructure or personally identifiable data of customers of our retail properties, trends in the retail industry, relationships with anchor tenants, the inability to collect rent due to the bankruptcy or insolvency of
tenants or otherwise, risks relating to joint venture properties, costs of common area maintenance, and the intensely competitive market
environment in the retail industry, risks related to international activities, insurance costs and coverage, terrorist activities, changes in economic and market conditions, the loss of key
management personnel and maintenance of our status as a real estate investment trust. Simon discusses these and other risks and uncertainties under the heading Risk Factors in its annual and quarterly reports filed with the SEC. Simon
undertakes no duty or obligation to update or revise these forward-looking statements, whether as a result of new information, future developments, or otherwise unless required by law.
About Sears Holdings Corporation
Sears Holdings
Corporation (NASDAQ: SHLD) is a leading integrated retailer focused on seamlessly connecting the digital and physical shopping experiences to serve our members - wherever, whenever and however they want to shop. Sears Holdings is home to Shop Your
Way®, a social shopping platform offering members rewards for shopping at Sears and Kmart as well as with other retail partners across categories important to them. The Company operates
through its subsidiaries, including Sears, Roebuck and Co. and Kmart Corporation, with full-line and specialty retail stores across the United States. For more information, visit www.searsholdings.com.
About Simon Property Group
Simon is a global leader in
retail real estate ownership, management and development and a S&P100 company (Simon Property Group, NYSE:SPG). Simons industry-leading retail properties and investments across North America, Europe and Asia provide shopping experiences
for millions of consumers every day and generate billions in annual retail sales. For more information, visit simon.com.
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