Electronics retail chain Best Buy may soon no longer be a public company.
Best Buy announced that it will allow founder and former chairman Richard Schulze access to all the private information necessary to form an investor group — meaning it’s allowing itself to be put up for sale. Schulze has 60 days to put together the team to officially make a buy out offer for the retail chain.
Best Buy is quick to point out in a press release that there’s no guarantee that Schulze will be able an acceptable offer to buy the company. Should he fail to convince the board of directors to take the offer, he’ll not get another chance until January 2013.
Schulze, who stepped down as Best Buy’s chairman earlier in the year, currently owns 20 percent of Best Buy stock. Back in May he offered shareholders $24 to $26 per share to take the company private. His offer is over 30 percent higher than the stock’s current price of $17-$18 per share, effectively valuing the company at $8.5 billion. That offer is generous, especially since Best Buy’s stock reached a nine-year low last week.
Part of Best Buy’s drop in stock price was due to decreasing quarterly profits as well as the unexciting announcement of new CEO Hubert Joly, who has a substantial pay package. With the company facing growing competition from online retails (such as Amazon), many investors worry that Best Buy won’t be able to rebound — making the buyout offer much more attractive.
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