Wall Street Remains Skeptical About Best Buy Founder's Takeover Offer

The stock price tells the basic story. If investors believed that Best Buy founder Richard Schulze was likely to succeed with the plan he unveiled yesterday then the company’s shares would be trading close to his proposed offer of as much as $26 a share. Instead they’ve settled in at about $19.90. One reason for the doubt: Best Buy is incorporated in Minnesota which sets an unusually high bar for hostile takeovers. Acquirers who don’t have board approval must own their stock in a target company for at least four years — and then win the support of owners of 80% of the voting shares. That’s too high a threshold even for Schulze, who controls 20.1% of Best Buy’s voting shares. And the conventional wisdom is that the board likely won’t support his offer. At the very least they’d want a higher bid, perhaps more than $30 a share, Jefferies Equity Research analyst Daniel Binder says in a report today. Directors (more…)

This article was printed from https://deadline.com/2012/08/best-buy-takeover-investors-skeptical-315046/