Best Buy Stock Jumps on Buyout Report13 Dec, 2012 By: Erik Gruenwedel
Shares of Best Buy Co. Dec. 13 shot up more than 15% in midday trading following a report founder Richard Schulze would submit an offer to buy the consumer electronics chain by the Dec. 16 deadline.
The Minneapolis Star Tribune reported Schulze, who founded the first Best Buy store (then called Sound of Music) in 1966 in neighboring St. Paul, Minn., has assembled private financing totaling $6 billion required to consummate the deal.
Schulze during the summer announced he was willing to offer $24 to $26 per share to take control of Best Buy and return it to a privately held business. Since that time, Best Buy shares have lost 45% of their value as the retailer continues to struggle with the economic recession and changing consumer habits toward purchasing consumer electronics — including e-commerce.
Best Buy CEO Brian Dunn resigned in April after acknowledging an inappropriate relationship with a female co-worker. The board admonished Schulze for not disclosing his knowledge of the affair. He later resigned as chairman.
Best Buy, which currently is headed by hospitality executive Herbert Joly, posted a $13 million loss in its most recent fiscal period.
Former Best Buy CEO Brad Armstrong and Al Lenzmeier, former president of the Minneapolis-based CE rail chain, are advising Schulze, according to the Star Tribune.