Best Buy drama ends (for now): Schulze fails to retake company


In a highly publicized effort, former Best Buy Chairman Richard Schulze had been trying for months to cobble together a deal to obtain control of the company he founded, but his efforts collapsed Thursday, as did his effort to return to the board of directors.

“This is how the deal ends. Not with a bang, but with a whimper,” Erik Gordon, a business and law professor at the University of Michigan in Ann Arbor, told Bloomberg. “Schulze never made a compelling case for going private.”

Thursday was Schulze's deadline to make a formal offer to buy the Minnesota-based company, but negotiations fizzled. Instead, at least two private equity groups that had been expected to partner with Schulze made offers for the company separately from Schulze, the Star Tribune reports. It wasn't clear why Schulze was not part of those bids, the newspaper reported.

Best Buy on Friday is expected to offer a final update on the failed negotiations as part of a quarterly earnings report. Schulze has not commented since Thursday.

In the end, Schulze and three firms, Cerberus Capital Management, Leonard Green & Partners and TPG Capital, had tried to put together a deal to buy a bigger stake in Best Buy that would have added to Schulze's roughly 20 percent stake, the New York Times reported. However, any genuine prospects for a takeover disappeared several weeks ago when the investor consortium decided it did not have the appetite for the debt in the leveraged buyout bid, the Times reported.

Schulze and the firms were proposing to take a minority stake in Best Buy in exchange for three seats on the board, the Wall Street Journal reported. The three private-equity firms had been talking about obtaining a stake of between $400 million and $700 million, which would have been separate from the 20 percent stake Schulze owns in the company, the Journal reported.

Best Buy shares have tumbled more than 11 percent since news first surfaced last June that Schulze was interested in a potential takeover, the New York Times noted.

Schulze, who launched the electronics retailing empire with a single St. Paul store in 1966, was forced to resign from the board last spring as the company staggered amid decreased sales and a tumbling stock price. But he almost immediately hatched a high-stakes plot to regain control. The Wall Street Journal has an interactive timeline of the company and the deal.

Hubert Joly joined the company as its new CEO in September.

One source told the Star Tribune that while a significant chapter in the company's turbulent recent history has now concluded, Schulze could always seek other opportunities to buy the company or gain control of the board.

“The journey is still starting,” the source told the newspaper.

Richfield-based Best Buy has 160,000 employees, including about 8,000 in Minnesota.

Next Up


Husband and wife sentenced for fraud scheme through their drywall firm

The Annandale pair bilked an insurance company out of more than $300,000.


4 pedestrians suffer life-threatening injuries after being struck by vehicle

Two vehicles crashed into a car that was on the side of the road after striking a deer.

Marcus Carr

Gophers season preview: New lineup, deeper bench, more questions

Mathew Goldstein takes a deep dive into the murky waters of the college hoops season.


Photos: ViV!R, Minneapolis' new Mexican cafe and shop, is now open

The team behind the acclaimed Popol Vuh have opened the cafe in the same space.


At Wiscoy Township's sole precinct, election judges ditched masks

Voter and Wiscoy resident Kaitlyn O'Connor took a photo of the judges after asking them to wear masks, she said

paisley park

Paisley Park to open pop-up shop at Mall of America

The new store is set to open on Black Friday.


COVID-19: Here's what Gov. Walz, Republicans are proposing to help businesses

Once they come to an agreement, Walz will call a special session to pass the legislation.

Jacob Frey

Minneapolis Mayor Jacob Frey planning to run for reelection

Frey said in a radio interview that 2020 has been a "horrible" year.


Monello, P.S. Steak will switch to sandwiches, noodles during shutdown

The Minneapolis eateries are pivoting during the closure of dine-in service.


Schulze commited to Best Buy takeover

More than a week after he went public with his bid to take the Richfield-based electronics giant private, co-founder Richard Schulze sent a letter to the Best Buy Board of Directors requesting permission to form a group and conduct basic due diligence so that he can present a fully financed offer for the company. Schulze wrote, "you should know that I am not going away."

Schulze to interview key Best Buy executives

Despite some opposition from board members, Best Buy CEO Hubert Joly has agreed to let company founder Richard Schulze and his team of potential investors to interview eight to 10 key executives, the Star Tribune reports. Schulze, Best Buy's largest shareholder, has until mid-November to make a buyout offer to take the struggling Richfield-based electronics retailer private. He is under a 60-day deadline to present a proposal to the company’s Board of Directors.

Key financiers support Schulze bid for Best Buy

Best Buy Co. Inc. founder Richard Schulze has recruited four big-name private equity firms – KKR & Co., Leonard Green & Partners, TPG Capital and Apollo Global Management – to help bankroll his $8.8 billion plan to buy the company, the Star Tribune reports.