Skip to main content

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

  • Author:
  • Updated:

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


Three new Grandstand shows added for Minnesota State Fair 2022

The Beach Boys and Portugal. The Man are among several acts booked.

St. Louis County

St. Louis County set to declare state of emergency ahead of peak flood levels

Volunteers are urgently needed for sandbagging efforts in a small community near Voyageurs National Park.

Screen Shot 2022-05-16 at 5.03.30 PM

Brothers Bar & Grill closes in downtown Minneapolis

The Midwest chain closed its St. Cloud location in 2018.

Ken Jeong

Licensed physician Ken Jeong to do standup in MN this September

The licensed physician will take the stage at Treasure Island Resort and Casino on Sept. 30.

Osseo Police Department

Osseo PD says officer did not pursue suspect who caused fatal crash

The crash happened in Brooklyn Park early Sunday morning.

221 Main Street. E. Albert Lea

Suspect arrested after 3 family members stabbed in Albert Lea

The three victims are related, according to police.


Evidence that omicron strains BA.4 and BA.5 are in Minnesota

The European CDC has warned of a possible significant summer surge fueled by the omicron subvariants.

driving unsplash - crop

Hastings man charged for driving drunk with 2-year-old in vehicle

Matthew Quade's BAC was almost five times over the legal limit when police pulled him over last week.

police lights

Arrest made after person shot at Hopkins apartment building

Police say this was an isolated incident and that the victim and suspect knew each other.


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.