Will Best Buy’s Custody Battle End This Week?
Best Buy’s (NYSE:BBY) founder and largest shareholder Richard Schulze is prepared to take the electronics retailer private. Citing sources familiar with the company, the Minneapolis Star Tribune reported on Wednesday that ahead of a December 16 deadline, Schulze is expected to make a fully financed offer of $5 billion to $6 billion to its board of directors.
What are the Particulars of Schulze’s Offer?
When Schulze made his first bid for the company on August 6, its stock price was close to $20 per share. But in the intervening months, shares have dropped nearer to $10 than to $20. Because of this drop, the former chairman lowered his bid from an initial offer of $24 to $26 per share, which added up to a total acquisition cost of $8.16 billion to $8.84 billion.
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To date, the attempted takeover has been messy. As Fortune described the situation, the acquisition process has been more akin to a heavily disputed custody battle than “a friendly M&A process.” According to the publication’s analysis, Schulze thinks the company’s current management is destroying Best Buy’s value, while the board of directors maintains that he is responsible for the retailer’s current woes. As a result, any attempts at an agreement have stalled.