Will Best Buy End Up Going PRIVATE?

Best Buy (NYSE:BBY) may go private as founder Richard Schulze considers selling his 20 percent shareholding in the electronics retailer. Schulze is said to be working with Credit Suisse (NYSE:CS) on his plans. According to at least one report though, the company’s board of directors may have made it more difficult for Schulze to force a shareholder vote on any buyout proposal after raising the ownership threshold for calling a special meeting to 25 percent from 10 percent.

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While Schulze had planned to leave his position as chairman after the company’s annual meeting on June 21, he resigned immediately on June 7 after it was found that he failed to tell the company’s board about allegations that then-chief executive Officer Brian Dunn was having an inappropriate relationship with a female employee. Mike Mikan was named interim CEO in April.

A buyout of Best Buy would cost at least $30 a share, according to BB&T Capital Markets analyst Anthony Chukumba, making up a total company value of about $11 billion.

Best Buy posted a net loss of $1.23 billion on revenue of $50.7 billion for the fiscal year that ended in March, its first annual loss since 1991. To cut down costs, the company is shutting 50 big-box locations in the U.S. this year. The stock has dropped 17 percent this year and 38 percent in the last 52 weeks. The stock was up 4.7 percent at $19.37 in after-hours trading on Tuesday.

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