This case is aboutÂ BUSINESS LAW
PUBLICATION DATE: February 03, 2000 PRODUCT #: 200044-PDF-ENG
Kmart, Inc. and Builders SquareÂ Case Solution
Green gave an offer to Kmart to purchase it in 1997. The offer compriseda $10 million cash payment, a warrant to purchase a 28% stake in the new entity later on, and the premise of about $1.5 billion in non-cancelable Builders Square lease obligations.
Kmart would remain contingently liable for the lease payments if the new thing were to fail. During the time period of sever improvement retailsector, the questions posed comprise (1) what is the value of the Builders Square subsidiary company?,(2) is the Green offer a great deal for Kmart?,and (3) should Kmart accept the offer or hold out for a higher offer or more offers?