Best Buy Founder Begins Due Diligence

3 Oct, 2012 By: Erik Gruenwedel

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Best Buy founder Dick Schulze, together with a group of investors, has reportedly begun the due diligence process of a planned leverage buyout of the consumer electronics retail chain he started in 1966 when it was called Sound of Music.

Apollo Global Management LLC, Cerberus Capital Management LP, TPG Capital LP and Leonard Green & Partners LP are among firms conducting due diligence on Best Buy, as are Schulze and his financial advisers at Credit Suisse Group AG, according to Reuters, which first reported the story.

Schulze, who owns 20.1% of Best Buy shares, has stated plans to return the chain to private ownership valued at more than $8 billion. That offer amounted to $24 to $26 per share. The proposal, which includes $1 billion of Schulze’s own money, initially stalled when both sides couldn’t agree to language in the due diligence agreement.

Minneapolis-based Best Buy and Schulze in August announced that they’d reached an agreement under which Schulze was granted access to certain due diligence information and permission to form an investment group with private equity sponsors in order to make a bid for the company. That agreement was good for 60 days.

The former chairman, who stepped down earlier this year after a falling out with the board over his non-disclosure of a personal conduct issue regarding former CEO Brian Dunn, was pleased that an agreement was reached allowing him to conduct the due diligence he had sought, according to a Best Buy statement.

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