Best Buy Founder Is Said to Consider a Takeover Bid

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Best Buy Founder Is Said to Consider a Takeover Bid

BY MICHAEL J. DE LA MERCED AND STEPHANIE CLIFFORD
June26, 2012
Richard Schulze, the founder of Best Buy, is exploring putting together a bid to take the struggling electronics retailer private, according to people briefed on the matter.

Mr. Schulze, who resigned from the company’s board this month, has been begun working with bankers from Credit Suisse to consider such a move, these people said. They said he would probably team up with a private equity firm or other deep-pocketed investor. With a 20.1 percent stake, he is the company’s largest shareholder.

But Mr. Schulze may instead sell his stake, these people cautioned. On the same day that he said he had resigned from the board a year ahead of schedule, Mr. Schulze made public his intention to sell. The resignation helps free him to explore a takeover bid for the company he founded more than 40 years ago.



The longtime guiding force behind Best Buy, Mr. Schulze had already agreed to part with the company, but not until his board term expired in 2013. That agreement came after a board investigation found that Mr. Schulze had known about an improper relationship between Best Buy’s former chief executive, Brian J. Dunn, and a female employee but had not informed the board.
Mr. Dunn resigned from the company in April. When the board released its investigation into Mr. Dunn’s conduct and Mr. Schulze’s knowledge of it, Mr. Schulze said that he accepted its findings.

Last week, after Best Buy’s shareholders’ meeting, the board changed its bylaws so that investors who wished to call a special meeting related to a change of control had to own at least 25 percent of the company’s shares. That makes it more difficult for Mr. Schulze to force a buyout.

Best Buy’s fundamental business continues to struggle. Its sales are faltering as consumers buy online instead of at stores. In the last quarter, sales at stores open at least a year declined 5.3 percent.

“We need to change substantially,” the company’s interim chief executive, G. Mike Mikan, said recently.

Mr. Schulze’s hiring of Credit Suisse was first reported by The Minneapolis Star-Tribune.

Representatives for Mr. Schulze and Credit Suisse declined to comment.