The agreement announced today clears the way for Richard Schulze to move forward with his plan to buy the consumer electronics chain and sent Best Buy shares up more than 7 percent to $18.55 in morning trading. Best Buy says the agreement will allow Schulze to get access to confidential financial statements and allow him to form an investment group with private equity sponsors to make the bid. He already owns 20 percent of the company’s stock. The retailer says the agreement establishes a non-exclusive orderly process for a bid while protecting the interests of all shareholders. Schulze says he’s pleased that an agreement was reached “which will allow him to conduct the due diligence he had sought”. Under the agreement, Schulze and his potential partners will then have 60 days to present a fully financed proposal. If Best Buy’s board reject’s Schulze’s proposal, they will have until January 2013 to present a second proposal. Best Buy’s board would have 30 days to review the second proposal before Schulze can take the offer directly to shareholders at the company’s annual meeting or a special meeting. If the second offer is turned down by both the board and Best Buy’s shareholders, he would have to wait one year before offering another proposal. In a letter to the board earlier this month, Schulze urged support for his effort to take the consumer electronics chain private, saying he’s “deeply concerned about the direction of the company”.
Best Buy Reaches Agreement With Founder Richard Schulze, Allows Pursuit Of Buyout
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