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Richard Schulze Offers to Take Best Buy Private

Best Buy

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.


Knight Capital Saved by Group of Investors

Wall Street

Knight Capital will continue to operate after a group of investors saved the company in a $400 million deal, but will cost existing shareholders. This group of investors will purchase preferred shares and will end up with a 73% stake in the company according to a statement from Knight Capital. The rescuing companies will buy [...]

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China Oil Company CNOOC to Buy Nexen for $15.1 Billion

oil rig

China’s third largest oil company, CNOOC, has agreed to buy Canadian oil producer Nexen Inc for $15.1 billion. This deal is a 61% premium over Nexen’s closing price on Friday as it tries to sell the deal to Nexen shareholders and the Canadian government. CNOOC has pledged to retain all employees with Nexen and to [...]

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McDonald’s Not Loving It Today

McDonalds

McDonald’s Corp (NYSE:MCD) reported second quarter results today and saw lower than expected profits. McDonald’s was hurt by a slowing global economy and the impact of a stronger dollar. The company also said that sales growth at established restaurants would slow down this month. McDonald’s shares are down 3% at $88.90 right now following these [...]

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IMF Will Support Greece, Dismisses Reports Saying Otherwise

EU

The International Monetary Fund said it will support Greece and help the country overcome its economic problems. The IMF dismissed a news report over the weekend that said the IMF may refuse to continue supporting Greece. The German weekly Der Spiegel reported over the weekend that Greece will need up to 50 billion more euros [...]

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Mario Draghi Reiterates Euro Zone is Not in Danger

european union

In an interview with French newspaper Le Monde, ECB President Mario Draghi was asked if the eurozone was in danger. Draghi said, “No, absolutely not. We see analysts imagining the scenario of a euro zone blow-up.” Some analysts have been predicting a complete eurozone break up as a worse case scenario. Draghi also said in [...]

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Nasdaq Will Setup $62 Million Facebook Compensation Plan

Facebook logo

On Friday, Nasdaq OMX Group Inc said it will file for a $62 million compensation plan for firms who lost money during the botched Facebook IPO in May. This compensation fund is larger than the $40 million fund previously proposed in June. The compensation will also be paid in cash instead of trade credits or [...]

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Boeing Sues US Air Force Over Delta IV Rocket

Boeing logo

Boeing Co. (NYSE:BA) is suing its biggest client, the US Air Force, for $385 million. Boeing alleges that it is owed nearly $400 million for Delta IV rocket launch services. Boeing and the United Launch Alliance, a JV with Lockheed Martin (NYSE:LMT), filed an official complaint on June 14 to “preserve their rights to recover [...]

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Unemployment Claims Surged Last Week, Home Sales Fall

Stock Market News

Initial claims for unemployment jumped 34,000 to an adjusted 386,000 last week, one week after claims had fallen 24,000 due to auto plants shutting down for the first week of July. Economists were expecting a rise to 365,000 last week. Now the four week moving average for new claims is at 375,500. The labor market [...]

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Morgan Stanley Plans Cuts This Year

Market News

Morgan Stanley is planning to cut more staff this year and expects its workforce to fall by 7%. These job cuts come as the bank prepares for weaker economic growth across the world and lower trading volume. Morgan Stanley reported a 24% drop in second quarter revenue to $6.95 billion, but the bank’s second quarter [...]

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Despite Poor Sales, J.C. Penney Stays With New Pricing Strategy

JC Penney

J.C. Penney’s CEO, Ron Johnson, said its new pricing strategy would remain in place despite hurting sales initially. Johnson, who used to run Apple’s retail stores, says he is treating J.C. Penney like a start-up company. At a Fortune magazine Brainstorm Tech Conference he said he had the full support of the company’s board of [...]

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Latest Earnings from IBM and eBay

Stock News

Stocks ended the day up for the second straight day led mostly by techs. Investors also kept a close eye on additional testimony from Ben Bernanke in which he continues to pledge the central bank is ready to inject more stimulus as needed. Thanks to the past few days of gains, the three major indexes [...]

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Yahoo! Looks to Marissa Mayer for Turnaround

YHOO logo

In what came as a surprise to many, Yahoo! picked Google’s Marissa Mayer to become the company’s newest CEO. Mayer was an engineer with Google and has established Silicon Valley credentials. She beat out acting CEO Ross Levinsohn to become Yahoo!’s third CEO in just one year. Many believe that this hiring signals that Yahoo! [...]

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Coca Cola and Goldman Sachs Earnings

New York Stock Exchange

Earnings season continues and two of the biggest companies posted their earnings this week. Goldman Sachs destroyed analysts’ estimates with their earnings despite a big drop from last year’s earnings. Coca-Cola reported slightly lower quarterly profit on Tuesday, but revenue beat expectations. Goldman reported second quarter earnings excluding certain items of $1.78 per share. This [...]

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IMF Says “Hard Landing” Possible in China, Cuts Forecast

Wall Street

The IMF now sees China’s growth forecast at 8% for 2012 and 8.5% for 2013 versus 8.2% and 8.8% respectively. China’s second quarter saw growth fall as exports and consumer spending weakened. Its growth for the quarter was just 7.6%, its lowest in three years. Analysts are looking for a rebound to begin in the [...]

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GlaxoSmithKline Finishes Deal to Acquire Human Genome

GSK logo

GlaxoSmithKline is set to acquire Human Genome Sciences for around $3 billion, ending a three month pursuit of the company. Over the weekend, Glaxo raised its bid for Human Genome to $14.25/share, up from $13/share which Human Genome rejected. Glaxo will now have full rights Benlysta, a lupus drug, and other medicines. Some of the [...]

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Citigroup Sees Earnings Fall 12%, but Better than Expected

Citigroup logo

Citigroup reported quarterly results on Monday and saw earnings fall by 12% due to losses from its credit crisis era assets. Despite these losses, the bank’s results were better than many analysts had expected. Citigroup is still dealing with the economic crisis from 2007 and 2008. The bank set up Citi Holdings in 2009 to [...]

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Corn Prices Surge as USDA Cuts Corn Outlook

Corn

The Department of Agriculture said corn will average 146 bushels per acre, down from its June estimate of 166 bushels per acre. This steep cut caught some traders off guard as they expected a more conservative decline in outlook. Corn prices jumped following this news with December contracts up $0.23 to $7.40 per bushel. Prices [...]

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More Austerity for Spain

EU

Spain’s Prime Minister, Mariano Rajoy, announced new taxes and spending cuts as the nation tries to slash 65 billion euros from the budget deficit by 2014 in order to meet targets it agreed on with the EU. Rajoy proposed a 3 point hike to the country’s sales tax, raising it to 21%. The PM also [...]

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Housing Sector Sees Good Data For a Change

Housing

New single-family home sales rose to a two year high in May, giving some hope the housing market may be recovering. Sales jumped 7.6% last month to an adjusted 369,000 unit annual rate. This is the highest its been since April of 2010. Economists were expecting around 346,000. While the housing market may be beginning [...]

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