Best Buys to return to a privately held company soon
August 28, 2012- The board of directors of Best Buy and Richard Schulze, its founder, reached an agreement on Monday that will allow Schulze to do due diligence and put together an investment group to make a bid for the electronics maker to return it to a privately held company.
Once the process of due diligence begins, Schulze has 60 days to bring to the company a fully financed and definite proposal, said the board of directors for the struggling company. If the board then rejects the offer, Schulze said he would not pursue another bid until January of 2013.
However, Schulze, if the first bid is rejected, would have the chance to present another offer to company shareholders at the annual meeting for the company in January. If both attempts by Schulze are rejected, he said he would not pursue a bid for the company for a full year.
Schulze founded the company in 1966; was its CEO through 2002 and still has 20% of the company stock. He has said he would pay between $24 and $26 a share to the company to buyout existing shareholders and take the company private.
Schulze left Best Buy in early 2012 following a scandal involving Brian Dunn the company’s former CEO. An internal investigation found that the former CEO had a personal relationship with an employee who was female and Schulze knew about the relationship but did not inform the board.
The company has over 1,400 stories but has struggled of late because of strong competition from retailers online. In its most recent fiscal year, the company suffered a $1.2 billion loss. That was compared to a $1.3 billion profit in the previous fiscal year.