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Sears REIT Launches $1.6 Billion Rights Offering, Lists on NYSE

Sears Holdings announced that its Seritage Growth Properties real estate investment trust (REIT) commenced a rights offering that would entitle its shareholders to buy 53.3 million common shares of the REIT at a $29.58 share price, valuing the offering at $1.57 billion.

The company said proceeds from the rights offering will go to fund part of the purchase price for its joint ventures with retail real estate companies—including Simon Property Group, General Growth Properties and The Macerich Company—in which Sears will sell 235 Sears and Kmart branded stores to the REIT and lease them back in an effort to unlock the value of its real estate for shareholders.

“Under the terms of the master leases with Sears Holdings and the joint ventures, Seritage has the right to recapture space from Sears Holdings, allowing Seritage to reconfigure and rent the recaptured space to third-party tenants over time,” Sears said in a statement.

The subscription rights are listed on the New York Stock Exchange (NYSE) under the symbol SRGRT. Unless the offering is extended, trading of the subscription rights will end at close of business on June 26, 2015.