Richard Schulze Seeks to Take Best Buy (BBY) Private at $24-$26/Share
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Best Buy (NYSE: BBY) founder Richard Schulze is prepared to make a takeover offer for the struggling electronics retailer that if successful would make shareholders very happy.
The former Chairman is planning to take the company private at $24-$26 per share.
Credit Suisse Group AG is acting as an advisor to Mr. Schulze and is confident it can obtain financing for an offer. The rest of the money will come from what the letter calls "premier private-equity firms with deep experience in retail who are interested in a possible acquisition of Best Buy" and debt.
Schulze is Best Buy's largest shareholder, controlling 20.1% of Best Buy shares.
Schulze said, "There is no question that now is the moment of truth for Best Buy and that immediate and substantial changes are needed for the company to return to its market-leading ways. After assessing all of 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. It is my strong preference to pursue an acquisition cooperatively with the Best Buy Board of Directors. I have made repeated requests to the Board for several weeks to provide me with due diligence information and the consent to form a group required under Minnesota law, both of which will be necessary to reach a definitive agreement. While I preferred a private negotiation, time is of the essence. I am deeply concerned that further delay and indecision will cause additional loss of both value and talented leaders who are now uncertain of the company’s future. In order to move forward, I am today submitting a concrete proposal for the Board to consider and publicly disclosing it consistent with my obligations as a 13D filer."
Schulze continued, "This proposal represents a unique win-win opportunity for everyone involved. It would create a new day for Best Buy employees and provide public shareholders with a significant all-cash premium for their shares. Importantly, it would eliminate the market and execution risk for Best Buy shareholders associated with a turnaround under an interim CEO, while giving the company the time and flexibility to take the steps it needs to win back customers and reinvigorate Best Buy’s trusted brand and culture of valued employees working together to satisfy our customers."
Schulze concluded, "Best Buy remains a great company with great people, but it is imperative that the company move quickly to put in place the right structure and strategy so it can unlock the talent within the company today and focus on the future. Best Buy has a long and proven track record of adapting to change, overcoming challenges, and coming out stronger than ever. Under the leadership of proven executives with the knowledge, insight, experience and passion needed to get the company on the right path forward, I am confident we can bring back Best Buy -- and that the name over the door will once again mean something special to our customers and employees."
While he has not reached any agreements with any of the private equity firms or former executives, Schulze is confident, based on discussions held to date, that he can do so in short order with the consent of the Best Buy Board to form a group.
The former Chairman is planning to take the company private at $24-$26 per share.
Credit Suisse Group AG is acting as an advisor to Mr. Schulze and is confident it can obtain financing for an offer. The rest of the money will come from what the letter calls "premier private-equity firms with deep experience in retail who are interested in a possible acquisition of Best Buy" and debt.
Schulze is Best Buy's largest shareholder, controlling 20.1% of Best Buy shares.
Schulze said, "There is no question that now is the moment of truth for Best Buy and that immediate and substantial changes are needed for the company to return to its market-leading ways. After assessing all of 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. It is my strong preference to pursue an acquisition cooperatively with the Best Buy Board of Directors. I have made repeated requests to the Board for several weeks to provide me with due diligence information and the consent to form a group required under Minnesota law, both of which will be necessary to reach a definitive agreement. While I preferred a private negotiation, time is of the essence. I am deeply concerned that further delay and indecision will cause additional loss of both value and talented leaders who are now uncertain of the company’s future. In order to move forward, I am today submitting a concrete proposal for the Board to consider and publicly disclosing it consistent with my obligations as a 13D filer."
Schulze continued, "This proposal represents a unique win-win opportunity for everyone involved. It would create a new day for Best Buy employees and provide public shareholders with a significant all-cash premium for their shares. Importantly, it would eliminate the market and execution risk for Best Buy shareholders associated with a turnaround under an interim CEO, while giving the company the time and flexibility to take the steps it needs to win back customers and reinvigorate Best Buy’s trusted brand and culture of valued employees working together to satisfy our customers."
Schulze concluded, "Best Buy remains a great company with great people, but it is imperative that the company move quickly to put in place the right structure and strategy so it can unlock the talent within the company today and focus on the future. Best Buy has a long and proven track record of adapting to change, overcoming challenges, and coming out stronger than ever. Under the leadership of proven executives with the knowledge, insight, experience and passion needed to get the company on the right path forward, I am confident we can bring back Best Buy -- and that the name over the door will once again mean something special to our customers and employees."
While he has not reached any agreements with any of the private equity firms or former executives, Schulze is confident, based on discussions held to date, that he can do so in short order with the consent of the Best Buy Board to form a group.
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