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Preview / WEEK OF MAY 19-25

Bids Due for Sears' Credit Card Business

May 19, 2003|From Reuters

At least six bids are expected this week for Sears, Roebuck and Co.'s credit card business and there is enough interest for the largest U.S. department store chain to sell the entire operation to one buyer, people close to the deal said Sunday.

Sears considered keeping its own branded card and selling just its MasterCard accounts, but with expressions of interest from the likes of General Electric Co. and Citigroup Inc., the sources said they thought the whole unit would be acquired.

Analysts have pegged a selling price as high as $7 billion for the $31-billion credit card portfolio. They also have said that GE and Citigroup, because of their purchasing power, are the most likely buyers of Sears' 25 million active credit card accounts. The Royal Bank of Scotland is another suitor, sources said.

Sears' credit card business, which as recently as last year accounted for two-thirds of the company's profits, became a drag on the stock price as investors worried about rising levels of bad debt.

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