Best Buy Takes One Step Closer to Going Private

Equities Editors Desk |

best buy closing stores, best buy loss, best buy closuresShares of struggling electronics retailer Best Buy, Inc. (BBY) traded up by as much as 7.7 percent today before settling in to close at $17.87 as the company's Board of Directors agreed to open up its books to former Chairman and founder Richard Schulze and his investment group as they plan to buy the company and take it private.



Last month, Schulze said he could pay as much as $26 per share for the company, which would represent a hefty premium based on where the stock is currently trading. However, the potential deal is still in the early stages as Schulze will need to examine Best Buy's financials to determine an offer. Schulze's group will have 60 days to offer a bid and then until January 2013 to offer a second offer if the initial one is rejected by the company's board.

Schulze, who announced his resignation as chairman of the company in May during a scandal involving former CEO Brian Dunn and a female employee, currently owns 20 percent of Best Buy's stock.

The retail chain, which was a top performer only a few years ago, has had a difficult time adjusting to the tough economy and evolving consumer trends and shopping habits. Best Buy's stock price has fallen roughly two-thirds from where it was two years ago.

The company has placed its turnaround hopes in the hands of Hubert Joly, who will start as CEO in September. Joly, who is receiving a hefty compensation package to take the reigns, is viewed as a turnaround expert with high level executive experience at Vivendi Universal Games and Carlson Wagonlit Travel. But whether he'll have the chance to implement any meaningful changes before the potential takeover may be out of his hands.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer

Companies

Symbol Name Price Change % Volume
IVR INVESCO MORTGAGE CAPITAL INC 16.75 0.08 0.48 2,192,473 Trade
BBY Best Buy Co. Inc. 55.18 -0.04 -0.07 4,088,402 Trade

Comments

Emerging Growth

Enertopia Corp

Enertopia Corp is engaged in the exploration of lithium in Nevada, USA. The Company's project includes Central Nevada Lithium Brine Projects.

Private Markets

MyForce, Inc.

As parents, we constantly worry about the safety of our loved ones. The media bombards us with incidents from across the nation school shootings, frequent assaults on campuses, and crimes…

GoCoin

Blockchain currencies (e.g. Bitcoin) provide a new disruptive way to transfer value between parties over the internet as opposed to going through banks. GoCoin provides online merchants with a suite…