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KMART AND PACE ANNOUNCE DEFINITIVE AGREEMENT FOR SALE OF UNITS

 TROY, Mich., Nov. 2 /PRNewswire/ -- Kmart Corporation (NYSE: KM) and PACE Membership Warehouse, Inc., a subsidiary of Kmart, today announced a definitive agreement under which PACE will sell 91 of its warehouses to Sam's Club, a division of Wal-Mart Stores, Inc. (NYSE: WMT). The sale includes all assets and lease obligations in the 91 warehouse locations being sold as well as virtually all inventory and membership files in the warehouses not included in the transaction. The sale price includes a premium over net book value which will be used to offset the cost of closing the units that are not part of this agreement. Currently PACE operates 113 units and has an additional 19 units under contract and unopened.
 Net proceeds equal to PACE's net tangible book value of approximately $300 million in cash will be realized from this transaction.
 The sale is subject to clearance of Hart-Scott-Rodino federal anti- trust provisions. It is anticipated that the sale will be completed in January 1994.
 If the sale is consummated, PACE will pursue alternative uses for the properties not sold under this agreement.
 As a result of the sale and closure of the PACE warehouses, Kmart anticipates a charge to its 1993 fourth-quarter earnings. While it is difficult to estimate closing costs on the 41 units not being sold, it is estimated that the charge to pretax earnings related to this transaction will approximate $450 million.
 The warehouses will be operated under the PACE name through the closing of this transaction. Employees working in the warehouses covered in the sale agreement will become Sam's employees.
 "Kmart's decision to sell these PACE Membership Warehouse locations is based on strategic factors designed to enhance shareholder value," said Joseph E. Antonini, Kmart chairman of the board and chief executive officer. "Kmart will continue to pursue all reasonable means to create value for our shareholders. With the PACE transaction and our previously announced intent to sell PayLess Drug Stores, the Kmart Specialty Retail Group will be well positioned to grow profitably in the years ahead. OfficeMax, The Sports Authority, Borders and Waldenbooks are leaders in their segments of specialty retailing, and Builders Square is a significant force in the very attractive do-it-yourself warehouse segment."
 Kmart Corporation serves America with over 4,000 general merchandise and specialty retail outlets in the United States, Puerto Rico, Canada, the Czech Republic and Slovakia.
 Kmart Corporation's stock is listed on the New York, Pacific and Midwest stock exchanges. Its trading symbol is KM.
 -0- 11/2/93
 /CONTACT: Orren F. Knauer or Lois M. Connelly (for analysts), 313-643-1040, or Shawn McGee Kahle (for media), 313-643-1021, all of Kmart and PACE/
 (KM WMT)


CO: Kmart Corporation; PACE Membership Warehouse, Inc.;
 Wal-Mart Stores, Inc.; Sam's Club ST: Michigan IN: REA SU: TNM


SB-JG -- DE006 -- 9542 11/02/93 09:40 EST
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Publication:PR Newswire
Date:Nov 2, 1993
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