Best Buy founder will make buyout offer by tomorrow -- report
Richard Schulze is expected to make a bid of between $5 billion and $6 billion, according to a new report.
Best Buy's Richard Schulze is ready to make his buyout bid for the company he founded.
By the end of this week, Schulze is expected to make a $5 billion to $6 billion offer for Best Buy, the Star Tribune is reporting, citing unidentified sources who claim to have knowledge of his plans. Last week, Schulze reportedly inked deals with private equity firms and bankers to help him finance the deal.
Schulze founded Best Buy in 1966. Over the summer, he submitted plans to buy out Best Buy for between $24 and $26 a share, representing a 36 percent premium on its price at that time of $17.64. Schulze said that the deal would allow him to institute a plan that would revitalize Best Buy's operation and address its issues. He would also take the company private.
For its part, Best Buy has been somewhat willing to allow Schulze to make an offer. In August, the board announced that it would allow Schulze to pursue his takeover bid, but did not say for sure that it would accept any deal.
That Schulze is reportedly readying a $5 billion to $6 billion offer is somewhat surprising. In a letter to the board in August, he said that he would pay as much as $8.8 billion for the big-box retailer.
That said, Schulze, who currently owns about 20 percent of Best Buy shares, was basing his possible deal on the value of Best Buy's shares at that time. Best Buy's stock ended the day yesterday at just over $12 a share -- a far cry from its 52-week high of $27.95.
However, Best Buy's shares are climbing. In early trading today, the company's stock is up $2.24, or 18.3 percent, to $14.42, following the Star Tribune's report.
Schulze stepped down as Best Buy chairman earlier this year after it was discovered that he had knowledge, but didn't tell the board, of an "extremely close personal relationship" then-CEO Brian Dunn had with an employee.