US electronics retailer Best Buy has confirmed that it has received an offer from founder and former chairman Richard Schulze to acquire all the outstanding shares in the company that he does not already own. The indication of interest described by Best Buy as “highly conditional” arrived in a public letter addressed to the board.
Best Buy has struggled recently and reported a loss of $1.23 billion (£787.6 million) in the year to March. Last November the company’s short lived venture into the UK market came to an end with the closure of the 11 commercial properties it operated in conjunction with Carphone Warehouse.
Billionaire Schulze, who owns 20 per cent of Best Buy, has offered $24 (£15) to $26 (£16) per share and his bid to buy back the company is believed to involve private equity firms. In June he resigned as chairman following his failure to inform board members of former chief executive Brian Dunn’s relationship with a female colleague which is contrary to company policy.
Mr Schulze launched Best Buy in 1966 as Sound of Music and it rapidly expanded to become one of the largest retailers in the US. Today it employs around 180,000 globally and offers a multi-channel service. Competition from Amazon and Apple’s own stores has contributed to the company’s difficulties but news of the takeover bid immediately led to a jump in share prices.
In a statement Best Buy said the board of directors will “evaluate this proposal carefully and will, as always, pursue the best course for its shareholders.”
Mr Schulze described it as a “moment of truth” for the company and said; “It is my strong belief that Best Buy’s best chance for renewed success is to implement with urgency the necessary changes as a private company.”
