(Corrects paragraph 4 to say Edward Lampert will exercise his rights, not sell shares)
Oct 2 (Reuters) - Sears Holdings Corp said it would sell most of its stake in Sears Canada Inc through a rights issue that would raise up to $380 million ahead of the holiday season.
Sears Holdings held a 51 percent stake in its Canadian unit as of March 13.
Sears Holdings will sell 40 million shares of Sears Canada, after which its stake would fall to about 12 percent, or around 12 million shares.
Edward Lampert, Sears Holdings' chief executive and largest shareholder, will exercise his rights in the offering. (Reporting by Sruthi Ramakrishnan in Bangalore; Editing by Kirti Pandey)