UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. ______)*
SEARS, ROEBUCK AND CO.
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(Name of Issuer)
Common Stock, par value $0.75 per share
--------------------------------------------------------------------------------
(Title of Class of Securities)
812387-10-8
--------------------------------------------------------------------------------
(CUSIP Number)
John Finley
Mario Ponce
Simpson Thacher & Bartlett LLP
425 Lexington Ave.
New York, New York 10017
(212) 455-2000
--------------------------------------------------------------------------------
(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications)
November 16, 2004
--------------------------------------------------------------------------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition that is the subject of this Schedule 13D, and is filing this
schedule because of Sections 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check
the following box. [X]
CUSIP NO. 812387-10-8
--------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
ESL Investments, Inc., a Delaware corporation
IRS IDENTIFICATION NO.: 75-2435723
--------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [X]
(b) [ ]
--------------------------------------------------------------------------------
3 SEC USE ONLY
--------------------------------------------------------------------------------
4 SOURCE OF FUNDS
AF
--------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEM 2(d) OR 2(e) [ ]
--------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
--------------------------------------------------------------------------------
7 SOLE VOTING POWER
31,049,166
-------------------------------------------------------------
NUMBER OF 8 SHARED VOTING POWER
SHARES
BENEFICIALLY 0
OWNED BY -------------------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING
PERSON WITH 31,049,166
-------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
0
--------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
31,049,166
--------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES [ ]
--------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
15.0%
--------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
CO
--------------------------------------------------------------------------------
CUSIP NO. 812387-10-8
--------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Edward S. Lampert
--------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [X]
(b) [ ]
--------------------------------------------------------------------------------
3 SEC USE ONLY
--------------------------------------------------------------------------------
4 SOURCE OF FUNDS
AF
--------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEM 2(d) OR 2(e) [ ]
--------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States
--------------------------------------------------------------------------------
7 SOLE VOTING POWER
31,100,000
-------------------------------------------------------------
NUMBER OF 8 SHARED VOTING POWER
SHARES
BENEFICIALLY 0
OWNED BY -------------------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING
PERSON WITH 31,100,000
-------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
0
--------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
31,100,000
--------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES [ ]
--------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
15.0%
--------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
IN
--------------------------------------------------------------------------------
CUSIP NO. 812387-10-8
--------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
RBS Partners, L.P., a Delaware limited partnership
IRS IDENTIFICATION NO.: 75-2241690
--------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [X]
(b) [ ]
--------------------------------------------------------------------------------
3 SEC USE ONLY
--------------------------------------------------------------------------------
4 SOURCE OF FUNDS
AF
--------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEM 2(d) OR 2(e) [ ]
--------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
--------------------------------------------------------------------------------
7 SOLE VOTING POWER
30,883,800
-------------------------------------------------------------
NUMBER OF 8 SHARED VOTING POWER
SHARES
BENEFICIALLY 0
OWNED BY -------------------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING
PERSON WITH 30,883,800
-------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
0
--------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
30,883,800
--------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES [ ]
--------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
14.9%
--------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
PN
--------------------------------------------------------------------------------
CUSIP NO. 812387-10-8
--------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
ESL Partners, L.P., a Delaware limited partnership
IRS IDENTIFICATION NO.: 22-2875193
--------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [X]
(b) [ ]
--------------------------------------------------------------------------------
3 SEC USE ONLY
--------------------------------------------------------------------------------
4 SOURCE OF FUNDS
WC
--------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEM 2(d) OR 2(e) [ ]
--------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
--------------------------------------------------------------------------------
7 SOLE VOTING POWER
22,810,436
-------------------------------------------------------------
NUMBER OF 8 SHARED VOTING POWER
SHARES
BENEFICIALLY 0
OWNED BY -------------------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING
PERSON WITH 22,810,436
-------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
0
--------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
22,810,436
--------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES [ ]
--------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
11.0%
--------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
PN
--------------------------------------------------------------------------------
CUSIP NO. 812387-10-8
--------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
RBS Investment Management, L.L.C., a Delaware limited liability company
IRS IDENTIFICATION NO.: 06-1512334
--------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [X]
(b) [ ]
--------------------------------------------------------------------------------
3 SEC USE ONLY
--------------------------------------------------------------------------------
4 SOURCE OF FUNDS
AF
--------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEM 2(d) OR 2(e) [ ]
--------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
--------------------------------------------------------------------------------
7 SOLE VOTING POWER
165,366
-------------------------------------------------------------
NUMBER OF 8 SHARED VOTING POWER
SHARES
BENEFICIALLY 0
OWNED BY -------------------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING
PERSON WITH 165,366
-------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
0
--------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
165,366
--------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES [ ]
--------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0.0%
--------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
OO
--------------------------------------------------------------------------------
CUSIP NO. 812387-10-8
--------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
ESL Institutional Partners, L.P., a Delaware limited partnership
IRS IDENTIFICATION NO.: 06-1456821
--------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [X]
(b) [ ]
--------------------------------------------------------------------------------
3 SEC USE ONLY
--------------------------------------------------------------------------------
4 SOURCE OF FUNDS
WC
--------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEM 2(d) OR 2(e) [ ]
--------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
--------------------------------------------------------------------------------
7 SOLE VOTING POWER
165,366
-------------------------------------------------------------
NUMBER OF 8 SHARED VOTING POWER
SHARES
BENEFICIALLY 0
OWNED BY -------------------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING
PERSON WITH 165,366
-------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
0
--------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
165,366
--------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES [ ]
--------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0.0%
--------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
PN
--------------------------------------------------------------------------------
CUSIP NO. 812387-10-8
--------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
ESL Investors, L.L.C., a Delaware limited liability company
IRS IDENTIFICATION NO.: 13-4095958
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [X]
(b) [ ]
--------------------------------------------------------------------------------
3 SEC USE ONLY
--------------------------------------------------------------------------------
4 SOURCE OF FUNDS
AF
--------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEM 2(d) OR 2(e) [ ]
--------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
--------------------------------------------------------------------------------
7 SOLE VOTING POWER
8,073,364
-------------------------------------------------------------
NUMBER OF 8 SHARED VOTING POWER
SHARES
BENEFICIALLY 0
OWNED BY -------------------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING
PERSON WITH 8,073,364
-------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
0
--------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
8,073,364
--------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES [ ]
--------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
3.9%
--------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
OO
--------------------------------------------------------------------------------
CUSIP NO. 812387-10-8
--------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
ESL Investment Management, L.L.C., a Delaware limited liability company
IRS IDENTIFICATION NO.: 06-1456822
--------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [X]
(b) [ ]
--------------------------------------------------------------------------------
3 SEC USE ONLY
--------------------------------------------------------------------------------
4 SOURCE OF FUNDS
WC
--------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEM 2(d) OR 2(e) [ ]
--------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
--------------------------------------------------------------------------------
7 SOLE VOTING POWER
50,834
-------------------------------------------------------------
NUMBER OF 8 SHARED VOTING POWER
SHARES
BENEFICIALLY 0
OWNED BY -------------------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING
PERSON WITH 50,834
-------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
0
--------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
50,834
--------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES [ ]
--------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0.0%
--------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
OO
--------------------------------------------------------------------------------
ITEM 1. SECURITY AND ISSUER
This Statement on Schedule 13D (this "Schedule 13D") relates to the
common shares, par value $0.75 per share (the "Sears Common Stock"), of
Sears, Roebuck and Co. ("Sears"). The principal executive offices of
Sears are located at 3333 Beverly Road, Hoffman Estates, Illinois,
60179.
ITEM 2. IDENTITY AND BACKGROUND
(a) This Schedule 13D is being filed by a group consisting of ESL Partners,
L.P., a Delaware limited partnership ("Partners"), ESL Institutional
Partners, L.P. ("Institutional"), ESL Investors, L.L.C. ("Investors"),
ESL Investment Management, L.L.C. ("Investment Management"), ESL
Investments, Inc., a Delaware corporation ("ESL"), Edward S. Lampert,
RBS Investment Management, L.L.C., a Delaware limited liability company
("RBSIM"), and RBS Partners, L.P., a Delaware limited partnership
("RBS", and collectively with Partners, Institutional, Investors,
Investment Management, ESL, Mr. Lampert and RBSIM, the "Reporting
Persons"). Attached as Schedule I hereto and incorporated herein by
reference is a list containing the (a) name, (b) citizenship, (c)
present principal occupation or employment and (d) the name, principal
business address of any corporation or other organization in which such
employment is conducted, of each director and executive officer of ESL
(the "ESL Directors and Officers"). Other than the ESL Directors and
Officers and Mr. Lampert, there are no persons or corporations
controlling or ultimately in control of ESL.
(b) The principal place of business of each of the Reporting Persons is 200
Greenwich Avenue, Greenwich, CT 06830.
(c) The principal business of each of the Reporting Persons is purchasing,
holding and selling securities for investment purposes. RBS is the
managing member of Investors and the general partner of Partners. ESL is
the general partner of RBS and the managing member of RBSIM. RBSIM is
the general partner of Institutional. Mr. Lampert is the sole
shareholder, chief executive officer and a director of ESL and the
managing member of Investment Management. Each of Investment Management,
ESL and Mr. Lampert also serves as general partner or managing member of
certain other entities engaged in the purchasing, holding and selling of
securities for investment purposes.
(d) None of the Reporting Persons has during the last five years been
convicted in a criminal proceeding (excluding traffic violations or
similar misdemeanors) or been a party to a civil proceeding of a
judicial or administrative body of competent jurisdiction and as a
result of such proceeding was or is subject to a judgment, decree or
final order enjoining future state securities laws or finding any
violation with respect to such laws. To the knowledge of the Reporting
Persons, during the last five years, none of the ESL Directors and
Officers has been convicted in a criminal proceeding (excluding traffic
violations or similar misdemeanors) or been a party to a civil
proceeding of a judicial or administrative body of competent
jurisdiction and as a result of such proceeding was or is subject to a
judgment, decree or final order enjoining future violations of, or
prohibiting or mandating activities subject to, federal or state
securities laws or finding any violation with respect to such laws.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
The shares of Sears Common Stock being reported on this Schedule 13D
were previously reported on a Schedule 13G. In view of the transactions
described in Item 4 below, the ownership of the shares of Sears Common Stock is
no longer being reported on Schedule 13G.
ITEM 4. PURPOSE OF TRANSACTION
On November 16, 2004, Sears entered into an Agreement and Plan of Merger
(the "Merger Agreement") with Kmart Holding Corporation ("Kmart"). The Merger
Agreement provides for a business combination whereby (i) Kmart will form a
newly-organized Delaware corporation to be named "Sears Holdings Corporation"
("Holdings"), (ii) a newly-organized Delaware corporation and wholly-owned
subsidiary of Holdings ("Kmart Merger Sub") will merge with and into Kmart, with
Kmart surviving ("Kmart Merger"), and (iii) a newly-organized New York
corporation and wholly-owned subsidiary of Holdings ("Sears Merger Sub") will
merge with and into Sears, with Sears surviving (the "Sears Merger" and,
together with the Kmart Merger, the "Mergers").
At the effective time and as a result of the Mergers, (i) Kmart and
Sears will become wholly-owned subsidiaries of Holdings, (ii) each share of
Kmart common stock ("Kmart Common Stock")(other than shares owned by Kmart or
Kmart Merger Sub) will be converted into the right to receive one share of
Holdings common stock, and (iii) each share of Sears Common Stock (other than
dissenting shares and shares owned by Sears, Sears Merger Sub, Kmart or any
wholly-owned subsidiary of Kmart or Sears) will be converted into the right to
receive, at the election of the holder thereof (a) $50.00 in cash (the "Cash
Consideration") or (b) 0.50 shares of common stock of Holdings (the "Stock
Consideration"), subject to proration. Sears stockholder elections will be
subject to proration to ensure that 55% of shares of Sears Common Stock will be
exchanged for Holdings shares and 45% of shares of Sears Common Stock will be
exchanged for cash.
Following the effective time of the Mergers, Holdings will have a
ten-member board of directors, which will include a total of seven current Kmart
directors and three current Sears directors. Mr. Lampert will be a director and
the Chairman of Holdings.
In connection with the Merger Agreement, at the specific request of
Sears, and as an inducement to Sears' willingness to enter into the Merger
Agreement, ESL, Partners, Investors, Institutional, Investment Management, CRK
Partners II, L.P. and CRK Partners LLC (the "Support Parties") entered into a
Support Agreement and Irrevocable Proxy with Kmart and Sears (the "Support
Agreement"). ESL and its affiliates beneficially own approximately 53.6% of the
common stock of Kmart (the "Kmart Common Stock"). Mr. Lampert is also Chairman
and a director of Kmart.
Pursuant to the Support Agreement, the Support Parties have agreed at
every meeting of the stockholders of Sears or Kmart, as applicable, and at every
postponement or adjournment thereof, and on every action or approval by written
consent of the stockholders of Kmart, to vote any shares of Sears Common Stock
or Kmart Common Stock (the "Common Stock") entitled to be voted thereat or to
cause any such shares to be voted: (i) in favor of adoption of the Merger
Agreement and (ii) against (A) any proposal made in opposition to adoption of
the Merger Agreement or in competition or inconsistent with the Mergers or any
other transaction contemplated by the Merger Agreement, (B) any Acquisition
Proposal, (as defined below), (C) any change in the management or board of
directors of Sears or Kmart (other than in connection with the transactions
contemplated by the Merger Agreement) and (D) any action or agreement that would
result in a breach of any representation, warranty, covenant or agreement or any
other obligation of Sears or Kmart under the Merger Agreement or of such Support
Party under the Support Agreement. The foregoing obligations of each Support
Party shall apply whether or not (x) the Board of Directors of Sears or Kmart,
as applicable (or any committee thereof) shall (I) withdraw or modify (or adopt
or approve any resolution to, or publicly disclose its intention to, withdraw or
modify) its recommendation to the holders of Sears Common Stock or Kmart Common
Stock, as applicable, to vote in favor of the adoption of the Merger Agreement
or (II) recommend any Acquisition Proposal (either action described in clause
(I) or (II) above, a "Change in Recommendation"), or (y) Sears or Kmart, as
applicable, breaches any of its representations, warranties, agreements or
covenants set forth in the Merger Agreement. Notwithstanding the foregoing, if
there occurs a Change in Recommendation by the Kmart Board of Directors, the
obligation of the Support Parties to vote in the manner set forth in clauses (i)
and (ii) above shall only apply to an aggregate number of shares of Kmart Common
Stock that is equal to one-third of the total number of shares of Kmart Common
Stock entitled to vote in respect of such matter and the Support Parties shall
cause all of their remaining shares of Kmart Common Stock to be voted in a
manner that is proportionate to the manner in which all holders of shares of
Kmart Common Stock (other than the Support Parties) vote in respect of such
matter.
"Acquisition Proposal" means, with respect to either Sears or Kmart, a
transaction to effect, a merger, reorganization, share exchange, consolidation,
business combination, recapitalization, liquidation, dissolution or similar
transaction involving it or certain of its subsidiaries or any purchase or sale
of 20% or more of the consolidated assets (including stock of its subsidiaries)
of it and its subsidiaries, taken as a whole, or any purchase or sale of, or
tender or exchange offer for, its voting securities that, if consummated, would
result in any person (or the stockholders of such person) beneficially owning
securities representing 20% or more of its total voting power (or of the
surviving parent entity in such transaction) or any of certain of its
subsidiaries.
In addition, the Support Parties have agreed to elect to receive the
Stock Consideration with respect to the conversion of all shares of Sears Common
Stock beneficially owned by the Support Parties in the Sears Merger.
Further, the Support Parties have agreed not to, directly or indirectly,
sell, transfer, assign, pledge, encumber or otherwise dispose of any of their
shares of the Common Stock or any other securities convertible into or
exchangeable for Common Stock, or any voting rights with respect thereto, or
enter into any contract, option or other arrangement or understanding with
respect thereto (including any voting trust or agreement and the granting of any
proxy), other than pursuant to the Mergers or with the prior written consent of
both Sears and Kmart.
The Support Agreement may be terminated at the option of any party at
any time after the earlier of (i) the termination of the Merger Agreement in
accordance with its terms and (ii) the day following the effective time of the
Mergers.
Following the effective time of the Sears Merger, (i) the certificate of
incorporation and by-laws of Sears will be amended so as to read in their
entirety as the certificate of incorporation and by-laws of Sears Merger Sub as
in effect immediately prior to the effective time, and (ii) it is contemplated
that the Sears Common Stock will cease to be listed on the New York Stock
Exchange and the Sears Common Stock will become eligible for termination of
registration pursuant to Section 12(g)(4) of the Securities Exchange Act of
1934, as amended.
In connection with the Merger Agreement and the Support Agreement, the
Support Parties intend to review on a continuing basis their investment in
Sears. The Support Parties may seek to influence management or the Board of
Directors of Sears with respect to the business and affairs of Sears, including
having Sears take action to facilitate consummation of the Sears Merger. Subject
to compliance with applicable law, the Support Parties may decide to increase
their investment in Sears depending upon the price and availability of Sears
securities, subsequent developments affecting Sears, other investment and
business opportunities available to the Support Parties, general stock market
and other conditions, tax considerations and other factors. From time to time,
the Support Parties may also, subject to compliance with applicable law,
communicate with other stockholders of Sears in furtherance of the transactions
contemplated by the Merger Agreement and the Support Agreement, including
soliciting stockholders of Sears to vote in favor of the Sears Merger and
related actions. On May 28, 2004, Partners filed a Notification and Report Form
under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the
"HSR Act") to enable it to acquire shares of Sears Common Stock, which when
added to shares of Sears Common Stock it already owns, would not exceed 24.99%
of shares of Sears Common Stock outstanding. The waiting period for such
Notification and Report Form was terminated on June 28, 2004. Pursuant to the
HSR Act, Partners may not acquire any additional shares of Sears Common Stock
if, after any such acquisition, Partners would hold 25% or more of shares of
Sears Common Stock outstanding unless a further Notification and Report Form has
been filed and the applicable waiting period has expired or been terminated.
The summaries of the Merger Agreement and the Support Agreement
contained in this Item 4 are qualified in their entirety by reference to the
Merger Agreement and the Voting Agreement, each of which is filed herewith as an
exhibit and incorporated herein by reference.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER
(a)-(b) The following table sets forth the aggregate number of shares of
Sears Common Stock and the percentage of outstanding shares of Sears Common
Stock beneficially owned by the Reporting Persons as of November 16, 2004, based
on 206,814,704 outstanding shares of Sears Common Stock as of October 30, 2004
(as described in Sears' Quarterly Report on Form 10-Q, filed November 9, 2004),
indicating the number of shares of Sears Common Stock for which each Reporting
Person has sole or shared power to direct the vote or the disposition
of such shares. The Reporting Persons as a group beneficially own an aggregate
of 31,100,000 shares of Sears Common Stock.
NUMBER OF
SHARES PERCENTAGE OF SOLE SHARED
REPORTING PERSON BENEFICIALLY OUTSTANDING SOLE VOTING SHARED DISPOSITIVE DISPOSITIVE
OWNED SHARES POWER VOTING POWER POWER POWER
ESL Investments, 31,049,166 (1) 15.0% 31,049,166 0 31,049,166 0
Inc.
Edward S. Lampert 31,100,000 (2) 15.0% 31,100,000 0 31,100,000 0
RBS Partners, 30,883,800 (3) 14.9% 30,883,800 0 30,883,800 0
L.P.
ESL Partners, 22,810,436 11.0% 22,810,436 0 22,810,436 0
L.P.
RBS Investment
Management, 165,366 (4) 0.0% 165,366 0 165,366 0
L.L.C.
ESL Institutional 165,366 0.0% 165,366 0 165,366 0
Partners, L.P.
ESL Investors, 8,073,364 3.9% 8,073,364 0 8,073,364 0
L.L.C.
ESL Investment
Management,
L.L.C. 50,834 0.0% 50,834 0 50,834 0
(1) Includes 30,883,800 shares of Sears Common Stock that may be deemed
beneficially owned by RBS and 165,366 shares of Sears Common Stock that may be
deemed beneficially owned by RBSIM that in turn may be deemed beneficially owned
by ESL. ESL is the general partner of RBS and the managing member of RBSIM.
(2) Includes 31,049,166 shares of Sears Common Stock that may be deemed
beneficially owned by ESL and 50,834 shares of Sears Common Stock beneficially
owned by Investment Management that in turn may be deemed beneficially owned by
Mr. Lampert. Mr. Lampert is the sole shareholder, chief executive officer and a
director of ESL and the managing member of Investment Management.
(3) Includes 8,073,364 shares of Sears Common Stock beneficially owned by
Investors and 22,810,436 shares of Sears Common Stock beneficially owned by
Partners that may be deemed beneficially owned by RBS. RBS is the managing
member of Investors and the general partner of Partners.
(4) Includes 165,366 shares of Sears Common Stock beneficially owned by
Institutional that may be deemed beneficially owned by RBSIM. RBSIM is the
general partner of Institutional.
(c) Not applicable.
(d) Not applicable.
(e) Not applicable.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO
SECURITIES OF THE ISSUER
Items 3, 4, and 5 of this Schedule 13D are incorporated herein by
reference.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS
Exhibit A Joint Filing Agreement
Exhibit B Agreement and Plan of Merger, dated as of November 16, 2004,
between Kmart Holding
Corporation and Sears, Roebuck and Co. (incorporated by
reference from Exhibit 2.1 to Sears, Roebuck and Co.'s Current
Report on Form 8-K, filed November 18, 2004 (file number
001-00416)).
Exhibit C Support Agreement and Irrevocable Proxy, dated as of November
16, 2004, among certain affiliates of ESL Investments, Inc.,
Kmart Holding Corporation and Sears, Roebuck and Co.
(incorporated by reference from Exhibit 99.1 to Sears, Roebuck
and Co.'s Current Report on Form 8-K, filed November 18, 2004
(file number 001-00416)).
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and correct.
DATED: NOVEMBER 19, 2004
ESL INVESTMENTS, INC.
By: /s/ William C. Crowley
----------------------
Name: William C. Crowley
Title: President and COO
EDWARD S. LAMPERT
/s/ Edward S. Lampert
---------------------
Edward S. Lampert
ESL PARTNERS, L.P.
By: RBS Partners, L.P., as its general partner
By: ESL Investments, Inc., as its general partner
By: /s/ William C. Crowley
----------------------
Name: William C. Crowley
Title: President and COO
RBS PARTNERS, L.P.
By: ESL Investments, Inc., as its general partner
By: /s/ William C. Crowley
----------------------
Name: William C. Crowley
Title: President and COO
RBS INVESTMENT MANAGEMENT, L.L.C.
By: /s/ William C. Crowley
----------------------
Name: William C. Crowley
Title: Member
ESL INVESTORS, L.L.C.
By: RBS Partners, L.P., as its manager
By: ESL Investments, Inc., as its general partner
By: /s/ William C. Crowley
----------------------
Name: William C. Crowley
Title: President and COO
ESL INSTITUTIONAL PARTNERS, L.P.
By: RBS Investment Management, L.L.C., as its
general partner
By: ESL Investments, Inc., as its manager
By: /s/ William C. Crowley
----------------------
Name: William C. Crowley
Title: President and COO
ESL INVESTMENT MANAGEMENT, L.L.C.
By: /s/ William C. Crowley
----------------------
Name: William C. Crowley
Title: Member
SCHEDULE I
The names, business addresses, present principal occupations, and citizenship of
the directors and executive officers of ESL Investments, Inc. are set forth
below. If no address is given, the director's or executive officer's principal
business address is 200 Greenwich Avenue, Greenwich, CT 06830. Unless otherwise
indicated, each occupation set forth opposite an individual's name refers to ESL
Investments, Inc.
NAME AND BUSINESS ADDRESS PRINCIPAL OCCUPATION CITIZENSHIP
Robert Jackowitz Chief Financial Officer United States
William C. Crowley President and Chief United States
Operating Officer
Edward S. Lampert Director, Chairman and Chief United States
Executive Officer
EXHIBIT INDEX
Exhibit A Joint Filing Agreement
Exhibit B Agreement and Plan of Merger, dated as of November 16, 2004,
between Kmart Holding Corporation and Sears, Roebuck and Co.
(incorporated by reference from Exhibit 2.1 to Sears, Roebuck
and Co.'s Current Report on Form 8-K, filed November 18, 2004
(file number 001-00416)).
Exhibit C Support Agreement and Irrevocable Proxy, dated as of November
16, 2004, among certain affiliates of ESL Investments, Inc.,
Kmart Holding Corporation and Sears, Roebuck and Co.
(incorporated by reference from Exhibit 99.1 to Sears, Roebuck
and Co.'s Current Report on Form 8-K, filed November 18, 2004
(file number 001-00416)).