Best Buy Founder Richard Schulze Offers To Take Company Private
Just as we suspected, Best Buy founder Richard Schulze has made an offer to take the company private at $24-$26 per share. Schulze was the chairman of the company up until June when former Best Buy CEO Brian Dunn was having an inappropriate relationship with a female employee. As a result of the offer, Best Buy’s stock had the biggest gain that it has ever had in a decade.
Schulze’s financial advisor Credit Suisse Group AG sent a letter to Best Buy’s board of directors about the offer. The offer is about 36% more than what Best Buy’s closing price was as of August 3rd. The mid-point range values the company at $8.5 billion. Schulze held over 20% of Best Buy as of June and is planning to contribute $1 billion in equity from that stake. The rest of the money would come from “premier private-equity firms with deep experience in retail who are interested in a possible acquisition of Best Buy.” Best Buy had about $1.7 billion in long-term debt as of May 5th according to regulatory filings.
“I have been actively exploring all available options for my ownership stake,” stated Schulze in the letter. “That exploration has reinforced my belief that bold and extensive changes are needed for Best Buy to return to market leadership and has led me to the conclusion that the company’s best chance for renewed success will be to implement these changes under a different ownership structure.”This article was written by Amit Chowdhry. You can follow me at @amitchowdhry or on Google+ at +AmitChowdhry