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.
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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