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(Reuters) - Retailer Sears Holdings Inc (SHLD.O) said on Monday it has decided to move ahead with plans to spin off its Sears Hometown and Outlet businesses and certain hardware stores as a separate company, and expects to raise $346.5 million from the deal.
The news comes as the retailer tries to be more profitable by spinning off non-core assets or selling real estate. Its shares rose more than 5 percent to $54.13 on Monday.
In February, the operator of Sears department stores and the Kmart discount chain said it would spin off its Sears Hometown and Outlet businesses and certain hardware stores through a rights offering. At the time, it expected to raise $400 million to $500 million from the deal.
The new entity will be listed on Nasdaq under the symbol "SHOS," said the company, which on Monday filed an amended preliminary prospectus for the rights offering with the U.S. Securities and Exchange Commission.
Designed for small to midsize markets, the Sears Hometown stores consist of hundreds of independently owned and operated U.S. stores.
Last month, the parent company said its former interim CEO, Bruce Johnson, had agreed to serve as chief executive and president of Sears Hometown and Outlet Stores Inc once the business is spun off.
Duff & Phelps acted as a financial adviser to Sears on the deal.
Financial weekly Barron's said recently that the retailer's stock could double to $100 if its chairman, hedge fund manager Edward Lampert, succeeds in restructuring the company through the spinoff or sale of some businesses and assets.
Barron's said in its latest edition published over the weekend that Lampert, who owns 62 percent of the stock, has structured the company to allow the full value of its assets to be realized, and wants that to happen in the next two years.
Sears' attractive assets include valuable real estate in Canada. Sears is planning to spin off half its Canadian unit this year.
Barron's also cited a hedge fund analyst who said many Sears stores in malls have long-term leases far below market rates that could prompt landlords to try to buy them out.
Sears, which operates Sears department stores and the Kmart discount chain, will report quarterly results on Thursday.
Reporting by Phil Wahba and Dhanya Skariachan, editing by Jeffrey Benkoe, John Wallace and Kenneth Barry