Richard Schulze made the plea in a letter he sent today to the board. It seems to be part of a PR campaign to rally shareholder support for his effort to take the consumer electronics chain private — in the hope that investors will pressure the board to cooperate with him. “I am deeply concerned about the direction of the company and, as Best Buy’s largest shareholder, I cannot simply stand aside,” he says. Last week Schulze, who controls 20.1% of the equity, said he was prepared to offer as much as $26 a share for the company, roughly $8.8B. (It closed yesterday at $19.36.) Schulze says today that the board dismissed his offer as a “highly conditional indication of interest” and hasn’t allowed him to form a group of private equity firms and lenders that could look at the books to solidify their offer. “I still hope to work with the Board on a mutually beneficial transaction – but you should know that I am not going away,” Schulze writes. “All I am asking is your permission to conduct due diligence and form a group so that I can quickly be in a position to give the Board a fully financed offer for your consideration.” Best Buy is incorporated in Minnesota, and the laws there make it virtually impossible for someone to acquire a company if the board opposes it.
Schulze says that “value is eroding every day” and his offer would enable the company to “take the strong actions that will be required to get back on track” as it struggles to compete with Walmart and online retailers led by Amazon. Shareholders like the news: Best Buy shares are +1.5% in early trading. But Wedbush Securities’ Michael Pachter says today that even though the board “has been slow to drive innovation at Best Buy during a crucial time in its history,” Schulze likely will need a big partner to complete his take-over plan “and we do not think he will find such a partner.”