Best Buy Founder Schulze Asks Board to Conduct Due Diligence
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Best Buy Co. (BBY) founder Richard Schulze, who has offered to take the retailer private, repeated a request that the company’s board allow him to conduct due diligence.
In a letter today, Schulze requested the board’s consent to allow him to form a group to support his proposal to acquire Best Buy for $24 to $26 a share.
Schulze, who held more than 20 percent of Richfield, Minnesota-based Best Buy as of June, plans to contribute at least $1 billion in equity from that stake. The rest would be financed through a combination of private equity investment and debt financing, according to today’s letter. Credit Suisse Group AG “is also highly confident” it can arrange the debt financing, he said.
Schulze initially sought permission to conduct due diligence Aug. 6 when he proposed acquiring Best Buy. He’s recruiting executives including former Chief Executive Officer Brad Anderson to revive sales as Amazon.com Inc. (AMZN), Wal-Mart Stores Inc. (WMT) and other rivals have lured customers.
Best Buy reiterated in an e-mailed statement today that it will consider Schulze’s letter pertaining to his “highly conditional unsolicited indication of interest.”
The retailer said Minnesota law doesn’t prevent Schulze from further exploring and engaging in discussions with private equity partners and that he doesn’t need the consent of the board to bring forward a proposal naming them.
Schulze said in his earlier letter to the board that under Minnesota corporate law he can’t form a bidding group with buyout firms, which would allow him to line up the equity, without the board’s permission.
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