ESL Investments Inc. (‘ESL’) made an offer to acquire an additional 41.74% stake in Sears Hometown and Outlet Stores Inc. (NasdaqCM:SHOS) (‘Sears’) for $23.1 million on April 5, 2019. A definitive agreement was signed on June 1, 2019 whereby ESL will acquire to acquire all of the outstanding shares of common stock of Sears not already owned by ESL and its affiliates for a price of $2.25 per share of common stock in cash, subject to an upward adjustment in the event that an outlet sale that satisfies certain criteria specified in the merger agreement has occurred. The upward adjustment will be equal to the excess, if any, of the net proceeds received by Sears Hometown as a result of any sale of the Outlet Segment over $97.5 million, divided by the aggregate number of shares of Sears common stock and unvested Sears restricted stock units issued and outstanding as of the closing of the merger transaction. Concurrently with the execution of the merger agreement, ESL executed a commitment letter pursuant to which ESL committed to contribute, or cause to be contributed, approximately $21 million to pay the merger consideration. Following closing, Sears will cease to be a publicly-held corporation. As of April 15, 2019, William K. Phelan and David Robbins were removed as Directors from Sears Board and certain bylaws were amended to set the size of the Board at seven members, or such other number of members as the Board may determine from time to time in the future along with imposing certain other procedural requirements. The transaction is subject to stockholder approval, the applicable waiting period (and any extension thereof) applicable to the merger under the HSR Act having expired or been terminated, the information statement being mailed to Sears stockholders, all obligations under the facility having been paid in full in cash unless waived by Bank of America N.A. and the applicable lenders, all letters of credit under the ABL facility having been terminated or cash collateralized and all commitments of the lenders shall have been terminated, all obligations under the term loan having been paid in full in cash unless waived by Gordon Brothers Finance Company and the applicable lenders, all commitments of the lenders having been terminated, receipt at the closing a certificate executed by an authorized executive officer of Sears dated as of the closing certifying that the conditions to closing have been satisfied and no credit agreement event of default having occurred and be continuing, other than any credit agreement event of default arising solely from actions taken in violation of this agreement or ESL in violation of the ESL letter agreement.   The Board of Directors of Sears granted a special committee of independent directors, comprising Kevin Longino, William Phelan and David Robbins, the exclusive authority to review and evaluate the proposal. Following the review of the proposal by the special committee and its advisors, the special committee concluded that a transaction on the terms contemplated by the proposal would not be in the best interests of Sears unaffiliated stockholders and communicated that conclusion to representatives of ESL. As of June 1, 2019, the transaction was negotiated and approved by a special committee of Sears Board of Directors, consisting of an independent and disinterested Director. The Board of Directors of Sears on recommendation of special committee unanimously approved the transaction and recommended shareholders to approve the transaction. The Board of Managers of ESL approved the transaction unanimously. ESL Partners L.P. and Edward S. Lampert executed and delivered a written consent adopting and approving the agreement on behalf of the stockholders of Sears. The closing of the transaction is expected to take place in Sears’ third quarter of 2019. As of August 27, 2019, the transaction is expected to close in October 2019. PJ Solomon LP and PJ Solomon Securities LLC acted as financial advisors to the special committee of independent directors of Sears. PJ Solomon Securities LLC provided a fairness opinion to the special committee of Sears. PJ Solomon LP and PJ Solomon Securities LLC will receive an aggregate fee of $2 million for the services provided in connection with the transaction. Creighton O’M. Condon and Rory B. O’Halloran and Drew Elphick of Shearman & Sterling LLP acted as legal advisors to the special committee of independent directors of Sears. Benet J. O’Reilly and Neil R. Markel of Cleary Gottlieb Steen & Hamilton LLP acted as legal advisors to ESL. ESL Investments Inc. completed the acquisition of additional 41.74% stake in Sears Hometown and Outlet Stores Inc. (NasdaqCM:SHOS) on October 23, 2019. In connection with the completion, Sears requested that the Nasdaq halt trading of the common stock following the close of business on October 23, 2019 and also requested that the Nasdaq file a Form 25 with the SEC to remove the common stock from listing on the Nasdaq and to deregister the company common stock.