2ND UPDATE, 5:53AM: Best Buy has officially announced the appointment of turnaround expert Hubert Joly as president and CEO, replacing interim CEO G. Mike Mikan. In a statement this morning, Best Buy board chairman, Hatim Tyabji, said: “Hubert’s range and depth of experience in transforming companies is exactly what the company needs at the moment, as is his energetic, imaginative and experienced leadership in executing strategies.” Joly will also join the company board.
UPDATE, 1:05AM: Amid the back-and-forth over Richard Schulze’s bid to acquire the struggling Best Buy, the company has found a new CEO in Frenchman Hubert Joly, The Wall Street Journal reports. Joly resigned as chief exec of global hospitality and travel company Carlson on Sunday. According to The Journal, Joly has been successful at turning around media and technology companies including a restructure of Vivendi’s videogame business. He is expected to take up his post in September. Best Buy will report earnings tomorrow and is expected to further outline its own turnaround plans at that time.
PREVIOUS: Last week, Best Buy founder Richard Schulze urged the company’s board to allow him to proceed with his effort to take the consumer electronics chain private at a valuation of about $8.8B. Yesterday, Best Buy said the board offered Schulze an opportunity to conduct due diligence and pursue his interest, but that Schulze declined to participate. Schulze, who resigned from the Best Buy board in June, controls 20.1% of the company’s equity. According to DealBook, a “shocked” Schulze said late Sunday: “We were in the process of negotiating an acceptable standstill period when, without notice to me or to any of my advisors, the board issued its announcement… I remain hopeful that the Board will engage in good faith discussions with us for the benefit of shareholders, employees and customers.”
In a Thursday letter to the board, Schulze said his early-August offer to pay as much as $26 per share for Best Buy had been dismissed as a “highly conditional indication of interest.” He said the board had not allowed him to form a group of private equity firms and lenders that could look at the books, adding, “I still hope to work with the Board on a mutually beneficial transaction – but you should know that I am not going away.”
On Friday, the Board convened to evaluate Schulze’s indication of interest and authorized advisers to initiate discussions on an agreement that would establish “an orderly process under which Mr. Schulze would both gain access to certain financial, operational and legal information and be able to move forward with discussions with private equity partners and debt financing sources, as he had requested,” the company said Sunday. Maintaining it showed “great flexibility” during weekend discussions, Best Buy said it believes the board has “insufficient information to make a reasonable conclusion with regard to Mr. Schulze’s indication of interest, given the conditional nature of the proposal and Mr. Schulze’s failure to date to disclose financing and equity partners.” The full Best Buy statement is here.
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