Best Buy founder to make $5 bln-$6 bln bid: report

Thu Dec 13, 2012 7:18pm IST

A Best Buy logo is seen during Thanksgiving Day in San Francisco, California, November 22, 2012. REUTERS/Stephen Lam/Files

A Best Buy logo is seen during Thanksgiving Day in San Francisco, California, November 22, 2012.

Credit: Reuters/Stephen Lam/Files

Related Topics

Stocks

   

REUTERS - Best Buy Co Inc (BBY.N) founder Richard Schulze is expected to make a fully financed offer to buy the consumer electronics retailer by the end of the week, the Minneapolis Star Tribune reported, citing a source.

Schulze's bid would be at least $5 billion to $6 billion, the newspaper reported late Wednesday, citing the source.

Schulze's bid at that level would be well below his initial offer range in August, when he said could acquire Best Buy for $24 to $26 per share, or a total between $8.16 billion and $8.84 billion. Including debt, it would be as much as $10.9 billion.

Best Buy shares jumped 12.2 percent to $13.66 in premarket trading. At that price, the retailer has a market capitalization of $4.6 billion.

A representative for Schulze did not immediately respond to a request for comment. Best Buy declined to comment on the report.

Since August the shares have fallen, and last month Best Buy reported a decline in same-store sales for the ninth time in the last 10 quarters.

Schulze will meet with his top advisers, including Brad Anderson, a former Best Buy chief executive, and Al Lenzmeier, a former president, in Minnesota on Thursday and Friday, the Star Tribune reported.

Schulze, who founded Best Buy in 1966, has said he would fund any deal through a combination of private equity and debt financing, as well as the reinvestment of some of his own equity in the company. He is Best Buy's biggest shareholder, with 20 percent ownership.

Last month, sources told Reuters that at least three private equity firms - Apollo Global Management LLC (APO.N), TPG Capital Management LP TPG.UL and Leonard Green & Partners LP - were considering joining Schulze in the bid.

Best Buy's dominance has faded in recent years as consumers increasingly use its big box stores to browse and try out products, then buy them online at Amazon.com Inc (AMZN.O) or other websites.

(Reporting by Phil Wahba and Dhanya Skariachan; Editing by Jeffrey Benkoe)

FILED UNDER:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared

Smartphone Wars

Reuters Showcase

Cloud Solutions

Cloud Solutions

Tencent teams up with IBM to offer business software over the cloud.  Full Article 

Cook Comes Out

Cook Comes Out

Apple's Cook: "I'm proud to be gay".  Full Article | Related Story 

 Rubin Quits

Rubin Quits

Android co-founder Andy Rubin to leave Google.  Full Article 

Glowing Flower

Glowing Flower

Video: Genetically altered glowing flower on display in Tokyo.  Video 

Web Fast Lanes

Web Fast Lanes

Comcast, AT&T seek to reassure on no plans for Internet 'fast lanes'.  Full Article 

Tech Reshuffle

Tech Reshuffle

Twitter product chief sidelined as user engagement slides.  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device.  Full Coverage