Best Buy’s founder said Monday that he wants to take the electronics retailer private by buying up all of its shares he doesn’t already own in a deal that values the company at as much as $8.84 billion.
Schulze said he wants to pay between $24 and $26 per share for Best Buy, which represents a 36 percent to 47 percent premium over the company’s Friday closing stock price.
Schulze said he would finance the deal through a combination of private equity investments, about $1 billion of his own equity and debt.
The offer is at least 36 percentmore than Best Buy’s closing price Aug.
Under the plan, Schulze, who founded the retailer under the name Sound of Music in 1966, would finance the deal through a combination of private equity investment, about $1 billion of his own equity and debt.
Richard Schulze, who stepped down from Best Buy’s board in the wake of misconduct accusations against its Chief Executive Officer, reportedly is putting together a management team to run the electronics retailer he hopes to take private.
Credit Suisse, Schulze’s financial advisor, has informed him it is highly confident it can arrange the necessary debt financing, Schulze said.
The rest of the money will come from what theletter calls “premier private equity firms with deep experiencein retail who are interested in a possible acquisition of BestBuy” and debt financing.
Schulze’s offer is based on current public information and is subject to due diligence.
He said he has held talks with past executives who are interested in rejoining the company, including former chief executive Brad Anderson and former chief operating officer Allen Lenzmeier.
At the time of his departure, Schulze said he was exploring all available options for ownership in the company.
Aninternal probe found he failed to tell the board aboutallegations that then Chief Executive Officer Brian Dunn was having an inappropriaterelationship with a female employee.
Schulze said he made the offer public after making repeated requests to the company for the information he needed to perform due diligence on the proposal.
Best Buy’s brick and mortar stores have been criticized for turning into showrooms where consumers can come and peruse electronics before buying them at discount or online retailers such as Amazon or Wal Mart.
Since company stores tend to have a monopoly in company towns, it was not uncommon for truck systems to emerge in isolated company towns.
“our feeling is that being private would give them more of an opportunity to experiment, try new things outside the glare of quarterly reports,” veteran industry analyst Walter Loeb said.
Kenneth Kennedy is a business journalist based in Hong Kong, China. Kenneth has a passion for financial markets and breaking news stories and loves writing about business news, stock market, and economic opinions that matters most to its audience. Kenneth spends a lot of time discovering and researching latest financial markets and industry news stories in order to make sure the latest and greatest stories are brought to you first on BigBoardNews.com.
