Richard Schulze, the founder of Best Buy, has offered to take the electronics retailer private in a deal worth $24-$26 a share or $8.16 to $8.84 billion. Schulze is also a former Best Buy chairman and owns a little more than 20.1% of Best Buy stock. This offer is a 36-47% premium over the stock’s closing price on Friday of $17.64.
Best Buy shares are up about 10% today at $19.50, well below the proposed offer price. This reflects investors skepticism that this deal will get done.
Best Buy has been struggling against competitors this year. The company has been cutting jobs and closing sores as it tries out a new store format to improve its business. Consumers don’t tend to buy things from Best Buy, rather they use the store to try out new gadgets before purchasing them for cheaper from online retailers like Amazon.
Schulze said he would finance the deal through a combination of private equity, debt and about $1 billion of his own equity. Schulze’s financial adviser, Credit Suisse, said it is confident it can arrange the necessary debt financing.
Schulze has also been in talks with past Best Buy executives who were interested in rejoining the company including former CEO Brad Anderson and former COO Allen Lenzmeier.