Best Buy offers are usually what people look for in the Sunday paper, but the company’s founder is making something a little bigger–a multi-billion dollar offer to take the company private.
Richard Schulze, who is Best Buy’s founder as well as the company’s largest shareholder, said he would put up as much as $8.5 billion to take the company private, BGR News reported. Rumors have circulated for some time that Schulze was planning a takeover, BGR News reported, and he even assembled a team of executives to take over the company if is buyout offer is accepted.
Schulze had to resign from the Best Buy board two months ago after an outside investigation determined that he failed to tell all board members about former CEO Brian Dunn’s inappropriate relationship with a female employee, the Minneapolis Star Trbune reported.
Shulze’s Best Buy offer was submitted in writing on Monday to the company’s board members. His offer includes a combination of investments from private equity firms, his own personal investments and debt financing.
Schulze said that he made many requests to the board over the last few weeks to provide him with due diligence information and the consent to form a buyout group. The board did not respond, he said.
He wrote in a news release:
“There is no question that now is the moment of truth for Best Buy and that immediate and substantial changes are needed for the company to return to its market-leading ways. After assessing all of my options, 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. It is my strong preference to pursue an acquisition cooperatively with the Best Buy Board of Directors.”
Schulze’s Best Buy offer amounts to between $24 and $26 per share, a price about 47 percent higher than the stock price reached at the end of trading last week. Shares of the company’s stock soared on news of the Best Buy offer, raising close to 25 percent to $21.97 in pre-market trading, BGR News stated.