Best Buy Founder Richard Schulze to Proceed with Due Diligence to Take the Company Private
August 28, 2012 8:53 AM
comment(s) - last by
Schulze has 60 to offer a purchase proposal
Retail electronics giant Best Buy has been going through some rough times as the company faces increasing pressure from online and discount retailers such as Amazon and Walmart. Best Buy founder Richard Schulze
about a month ago that he was considering an attempt to take Best Buy private with private equity or possibly selling his 20% stake in the company.
The Best Buy board and Schulze have announced that they have reached an agreement that will permit Schulze to form an investment group and conduct due diligence needed to make a fully financed proposal to acquire Best Buy. The agreement establishes a non-exclusive, orderly process with Schulze and has been filed with the SEC.
The agreement allows Schulze to perform immediate due diligence with access to non-public company information to be shared with advisors and potential private-equity partners. Under the terms of the agreement, Schulze will be allowed to bring forward a fully financed and definitive proposal within 60 days of the beginning of the due diligence period. The due diligence period can also be extended in certain circumstances.
Schulze has also agreed that if his proposal is rejected by the Board of Directors, he will not pursue an acquisition until January 2013. At that time, Schulze will have the opportunity to make a second offer if the original is rejected. The
Wall Street Journal
reports that Schulze has previously publicly announced that he was proposing a $10 billion buyout of the company he helped found and that his financial partners were "highly confident" that the money to purchase the company could be raised.
Best Buy has also announced that it will offer Schulze two seats on the company's board reflecting the 20% of the company he owns. However, the two seats could be withdrawn if Schulze decides to make a purchase offer directly to shareholders or violates standstill provisions of the agreement.
Wall Street Journal
This article is over a month old, voting and posting comments is disabled
8/28/2012 4:27:45 PM
The other advantage of B&M stores (the biggest IMHO) is rapport and professional advice from the staff. There are a couple local camera and fishing stores which I frequently buy from because if there's something I need and I have absolutely no idea where to start looking, I
they will set me up right. Their staff is knowledgeable and steers me to the right purchase without any upsell or ripoff.
Sure their price is a bit higher than online, but compared to the hours of researching they save me, I gladly pay it. e.g. For my latest reel purchase I was told, "You don't need the more expensive one. It's got a couple extra bearings and some fancier plating, and that's about it. Unless you fish 100 days a year, you're never going to notice the difference." They saved me $80, so I was more than happy to pay $25 higher than online for the reel I did buy.
Unfortunately for stores like Best Buy, they place little value in this sort of good advice and purchase guidance. In fact they've been exploiting people expecting this from a B&M store, by hiring salesmen who know nothing but are really good at acting as if they know what they're talking about while they pitch their upsell. They develop no customer loyalty, and consequently are first on the chopping block as Internet sales pressure B&M stores.
"So, I think the same thing of the music industry. They can't say that they're losing money, you know what I'm saying. They just probably don't have the same surplus that they had." -- Wu-Tang Clan founder RZA
Best Buy Founder Looks to Go Private with Help of Former Execs
July 31, 2012, 5:42 PM
Not All the High-Tech Jobs Are in California
August 4, 2016, 8:29 PM
Google's Gleaming Glass HQ Gets Mountain View Snub, LinkedIn Gets the Love
May 7, 2015, 6:58 AM
Tech's Tax Day Fortunate Few: Qualcomm, Xerox, GE, et al. Pay Little or No Taxes
April 15, 2015, 11:30 AM
LinkNYC Terminals to Blanket New York City With Free WiFi, Free Calls, and Ads
November 17, 2014, 6:50 PM
Microsoft is Open-Sourcing Most of .NET, Adding OS X and Linux Support
November 12, 2014, 8:27 PM
Home Depot Lost 53 Million Emails, Blames Windows, Buys Execs New Macs
November 9, 2014, 5:00 PM
Most Popular Articles
Update: Problem-Free Galaxy Note7s CPSC Approved
September 22, 2016, 5:30 AM
FDA Cleared, Shockwave Lithoplasty for Peripheral Vascular Disease
September 22, 2016, 5:45 AM
Walmart may get "Robot Shopping Carts?"
September 17, 2016, 6:01 AM
Are you ready for this ? HyperDrive Aircraft
September 24, 2016, 9:29 AM
Smartphone Screen Protectors – What To Look For
September 21, 2016, 9:33 AM
Latest Blog Posts
Burlington Gun Attack
Sep 27, 2016, 5:00 AM
Who is in Risk of Getting Oral Cancer?
Sep 23, 2016, 6:02 AM
France Bans Plastic Eating Utensils in Restaurants
Sep 18, 2016, 10:49 AM
Progress Against Acute Myeloid Leukemia
Sep 17, 2016, 5:30 AM
Apple Watch Series 2 - Number 1 in the Customer Satisfaction.
Sep 7, 2016, 6:19 PM
More Blog Posts
Copyright 2016 DailyTech LLC. -
Terms, Conditions & Privacy Information