Best Buy founder: C'mon, folks, my takeover plan will work
Richard Schulze created one of the country's favorite electronics hubs. Now, he's making a very public pitch that he's the best man to lead the company out of its nosedive.
With each passing day, Best Buy appears headed for a family feud.
Richard Schulze, the founder who was on the outs with Best Buy's board when he resigned his seat in June, continues to try to persuade directors to sell him the company. Schulze today sent the board a letter saying he would pay up to $8.8 billion for the floundering big-box electronics chain, according to a New York Times report.
"I am deeply concerned about the direction of the company," Schulze said in the letter. "As Best Buy's largest shareholder, I cannot simply stand aside. I still hope to work with the board on a mutually beneficial transaction -- but you should know that I am not going away."
Best Buy stores were once among the country's top hubs for electronics gear, DVDs, and CDs. In 2004, Forbes magazine named Best Buy "Company of the Year." Schulze founded the company in 1966 as an audio-equipment store but changed the focus to electronics in 1983.
The past few years have brought increased competition from Amazon and other online retailers and the company has also felt the effects of a shift in consumer-buying habits. The Minneapolis-based retailer has been plagued by earnings shortfalls and in March announced it would close 50 stores by the end of the year.
Schulze in his letter to Best Buy's board again asked permission to form a group of investors to buy the company and to perform due diligence, according to the Times. In the board's response, directors sounded a bit skeptical that Schulze has the investors he needs and asked if he would need their permission.
"Best Buy's board of directors will review and consider the letter in due course, consistent with its fiduciary duties, and will, as always, pursue the best course for its shareholders," the board said in a statement. "Minnesota law does not prevent him from further exploring and engaging in discussions with his private equity partners, and he does not need the consent of Best Buy's board of directors to bring forward a proposal that names them."
There likely is some bad blood between the board and Schulze. Directors were critical of Schulze's handling of the scandal involving Brian Dunn, the company's former CEO. Best Buy determined in April, following an investigation, that Dunn, 52, had entered into an "inappropriate relationship" with a 29-year-old employee.
The board said Schulze learned of the relationship in December and didn't report it to other board members. Schulze resigned as chairman soon after.