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Sears Holdings Corporation Board of Directors Approves Spin-Off of Its Interest in Orchard Supply Hardware Stores Corporation

Dec 12, 2011

HOFFMAN ESTATES, Ill., Dec. 12, 2011 /PRNewswire/ -- Sears Holdings Corporation ("Holdings," "we," "our" or the "Company") (NASDAQ: SHLD) today announced that its board of directors approved the spin-off ("spin-off") by Holdings of its interest in Orchard Supply Hardware Stores Corporation ("Orchard").  The Company will distribute all of the Orchard Class A Common Stock ("Class A Common Stock") and Orchard Series A Preferred Stock ("Preferred Stock") held by Holdings on a pro rata basis to holders of Holdings common stock.  The distribution will be made on December 30, 2011 to Holdings' shareholders of record as of the close of business on December 16, 2011, the record date for the spin-off.  Every 22.141777 shares of Holdings common stock held as of the close of business on the record date will entitle the holder to a distribution of one share of Class A Common Stock and one share of Preferred Stock.  Fractional shares of Class A Common Stock and Preferred Stock will not be distributed.  Instead, the distribution agent will aggregate fractional shares into whole shares, sell such whole shares in the open market at prevailing prices and distribute the net cash from proceeds from the sales to holders who otherwise would have been entitled to receive fractional shares in the distribution.

Following the spin-off, Holdings will continue to be listed on the NASDAQ Global Select Market under the symbol "SHLD," while Orchard expects to list its Class A Common Stock on the NASDAQ Capital Market under the symbol "OSH" and to have the Preferred Stock quoted on the OTCQB.  We expect that on or about December 14, 2011 and through the distribution date, there will be two markets in Holdings common stock: a "regular-way" market and an "ex-distribution" market.  Holdings common stock that trades on the regular-way market will trade with an entitlement to shares of Class A Common Stock and Preferred Stock on the distribution date.  Shares that trade on the ex-distribution market will trade without an entitlement to shares of Class A Common Stock and Preferred Stock on the distribution date.

Holders of Holdings common stock as of the record date will not be required to make any payment, surrender or exchange any shares of Holdings common stock or take any other action to participate in the spin-off.  A prospectus containing information regarding the procedures by which the distribution will be effected and other details of the transaction are contained in a registration statement filed by Orchard and available on the Securities and Exchange Commission's website at www.sec.gov.

We expect that the spin-off will be tax-free to Holdings' shareholders for U.S. federal income tax purposes, except for any cash received in lieu of fractional shares.  The spin-off is subject to the satisfaction or waiver of a number of conditions listed in a distribution agreement to be entered into between Holdings and Orchard and described in Orchard's registration statement.  If the conditions are met in accordance with the timing currently contemplated, the separation will be effective on December 30, 2011 and book-entry account statements reflecting the Orchard shares will be distributed to the eligible Holdings' shareholders on or about December 30, 2011. Upon completion of the spin-off, Holdings will cease to have any ownership interest in Orchard, and Orchard will become a publicly traded company independent of Holdings.

Forward-Looking Statements

Certain material presented herein includes forward-looking statements intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, but are not limited to, statements about the spin-off by Holdings of its interest in Orchard and Orchard becoming an independent publicly traded company (the "companies"), the terms of the spin-off, the dates on which actions relating to the spin-off are expected to occur, future trading of the stock of Holdings and Orchard, tax consequences of the spin-off, and other statements that describe the companies' plans.  Whenever used, words such as "will," "expect," and other terms of similar meaning are intended to identify such forward-looking statements.  Forward-looking statements are subject to risks and uncertainties that may cause actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by these forward-looking statements.  Such statements are based upon the current beliefs and expectations of our management and are subject to significant risks and uncertainties, including risks and uncertainties relating to the spinoff of Holdings' interest in Orchard, such as the timing and certainty of the completion of that transaction, whether that transaction will result in any tax liability, the operational and financial profile of Holdings or any of its businesses after giving effect to the spin-off, and the ability of each business to operate as an independent entity, and other factors set forth in the prospectus that will be contained in the registration statement on Form S-1 filed with the SEC by Orchard with respect to the spin-off.  A detailed description of other risks relating to Holdings are set forth in our annual report on Form 10-K for the fiscal year ended January 29, 2011 and our other filings with the SEC.  We intend the forward-looking statements to speak only as of the time made and, except as required by law, do not undertake to update or revise them as more information becomes available.

About Sears Holdings Corporation

Sears Holdings Corporation is the nation's fourth largest broadline retailer with over 4,000 full-line and specialty retail stores in the United States and Canada.  Sears Holdings is the leading home appliance retailer as well as a leader in tools, lawn and garden, consumer electronics and automotive repair and maintenance.  Sears Holdings is the 2011 ENERGY STAR® Retail Partner of the Year.  Key proprietary brands include Kenmore, Craftsman and DieHard, and a broad apparel offering, including such well-known labels as Lands' End, Jaclyn Smith and Joe Boxer, as well as the Apostrophe and Covington brands.  It also has the Country Living collection, which is offered by Sears and Kmart.  We are the nation's largest provider of home services, with more than 11 million service calls made annually.  Sears Holdings Corporation operates through its subsidiaries, including Sears, Roebuck and Co. and Kmart Corporation.  For more information, visit Sears Holdings' website at www.searsholdings.com. Twitter: @searsholdings | |Facebook: http://www.facebook.com/SHCCareers

NEWS MEDIA CONTACT:
Sears Holdings Public Relations
(847) 286-8371

SOURCE Sears Holdings Corporation

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