Schulze Proposes Buyout of Best Buy Shares
MINNEAPOLIS-Richard Schulze, founder and former chairman of Best Buy, has offered to buy all of the retailer's common stock which he doesn't already own, with a view to taking the retailer private.
In a press release filed with the U.S. Securities and Exchange Commission, Schulze said he is offering to buy the stock for $24 to $26 a share, a premium of 36 percent to 47 percent over Best Buy's closing stock price of $17.64 on Aug. 3. He is currently Best Buy's largest shareholder, owning 20.1 percent of the shares. Schulze said that, based on discussions with private-equity firms interested in participating in the acquisition, he would finance the deal through a combination of investments from these firms, reinvesting about $1 billion of his own equity and debt financing.
Schulze said Credit Suisse, his financial advisor, told him that it's "highly confident" that it could arrange the necessary debt financing. He has also held discussions with former Best Buy CEO Brad Anderson and former President and Chief Operating Officer Allen Lenzmeier about rejoining the company once the deal goes through.
He added that Best Buy would need "immediate and substantial changes" for the retailer to become a market leader once again. "After assessing all my options, it is my strong belief that Best Buy's best chance for renewed success is to implement with urgency the necessary changes as a private company," he said.
In a statement issued this morning, Best Buy acknowledged that it had received Schulze's offer, and that it would evaluate the proposal with a view toward following the best course of action for its shareholders.
Schulze founded Best Buy in 1966 and served as its CEO until 2002. He was chairman until early June when he resigned his post after the Best Buy board found that he had acted inappropriately in the matter of former CEO Brian Dunn. The board elected Hatim Tyabji, chairman and CEO of Bytemobile, to succeed Schulze.