Best Buy takeover talks said to have ended without deal
Founder of the struggling electronics retail giant had hoped to regain control and take the company private.
It appears that Best Buy founder Richard Schulze will not be resuming control of the struggling electronics retail giant any time soon.
Negotiations between the Best Buy and Schulze's investment group have concluded without an agreement for taking the company private, sources with knowledge of the matter told The New York Times, although they cautioned that talks could resume in the future.
Schulze, who founded Best Buy in 1966 and served as CEO until 2002, still owns 20 percent of the company and had proposed paying between $24 and $26 per share in cash to acquire the outstanding shares he doesn't own -- a premium of as much as 40 percent over today's closing price of $17.50. Schulze told the company's board last August that he would pay up to $8.8 billion for the big-box electronics chain, saying he was "deeply concerned about the direction of the company."
However, The Times' sources said the investment group's interest soured several weeks ago on the debt involved in the takeover effort
Schulze stepped down as chairman last year after getting caught up in a scandal involving former CEO Brian Dunn. During its investigation, Best Buy found that Schulze had learned of Dunn's relationship with a female employee but didn't inform anyone, prompting the board to ask him to step down.
CNET has contacted Best Buy for comment and will update this report when we learn more.
Best Buy was originally due to release its fourth-quarter and fiscal 2013 earnings today, the same day as Schulze's deadline to submit a buyout offer. The Richfield, Minn.-based company pushed its presentation back a day, fueling speculation that a deal was at hand. However, a company spokesperson told the Star Tribune that the surprise delay was intended only to allow the bid deadline to expire.
With more than 1,400 stores, the company has been struggling to compete with online retailers.
Correction at 5:20 a.m. PT March 1: The year of Best Buy's founding was incorrect. It was founded in 1966.