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Sears

November 11, 2013 Leave a comment Go to comments

Sears is basically putting its value creating strategy to work this year. After the spin-offs this year, we are finally seeing Sears Canada realize the value from its real estate assets. This news out today, from Sears Canada:

Sears Canada Inc. is selling its 50-per-cent joint venture interest in eight properties in a deal valued at about $315-million.

This news is following a $400M sale that Sears Canada announced just a few months ago. So what does Sears Canada do with all these cash?

Mr. Howlett said he continues to expect Sears Canada to pay a special dividend of $4 to $5 before the end of the year from the proceeds of selling department-store leases back to landlords. But the additional proceeds from the Montez sale could push the dividend to as high as $6, he said.

Sears Holdings own 51% of Sears Canada. So this dividend will be a sweet addition to the Sears cash pile. More importantly, this is another sign that the asset value at Sears is finally getting realized and shareholders will benefit.

Sears Canada was selling at less then $10/share at start of 2013. I was looking at it and knew the value of the shares was atleast high-teens to $20+. One of my favorite investors, Francis Chou, bought a good stake in first-half of 2013. But I just sat there and sucked-my-thumb. A mistake we regret now, as the stock has almost doubled. But atleast we did the right thing and pulled the trigger on Sears.

 

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