Sears to Acquire Orchard Supply, Hardware Chain, for $415 Million
April 27, 2011
HOFFMAN ESTATES, Ill. -- Sears Roebuck & Co. agreed to buy Orchard Supply Hardware Stores Corp. for about $415 million. Sears said it would pay about $35 per share, a healthy premium for holders of stock in the San Jose, Calif., hardware retailer. Orchard Supply's shares were up $4.875 at $34.625 in heavy trading on the New York Stock Exchange Thursday afternoon. Orchard Supply runs 60 hardware superstores in northern and central California, each averaging 40,000 square feet of selling space. Sears, in addition to its department stores, operates a chain of stand-alone hardware stores. Sears said that under a definitive agreement, it will begin a cash tender offer on May 03, 2011 all of Orchard's roughly 8.8 million outstanding common shares, including 1.28 million shares issuable upon conversion of preferred stock. Orchard's board unanimously approved the agreement and recommended that stockholders tender their shares. In connection with the acquisition agreement, affiliates of Freeman Spogli & Co., Orchard's largest shareholders, have agreed to tender their 1.6 million common shares and have also granted Sears an option on such shares at $35 each.
