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Best Buy founder offers $26 a share to buy retailer

Best Buy Co. founder Richard Schulze, who stepped down as chairman this year, has offered to take the electronics retailer private at $24 to $26 a share, Bloomberg reports. Credit Suisse Group AG, Schulze’s financial adviser, is confident it can obtain financing for an offer, according to a letter sent to the board Monday. “I have been actively exploring all available options for my ownership stake,” Schulze, 71, said in the letter. Best Buy shares surged as much as 34 percent in early trading.
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Best Buy founder 71-year-old chairman Richard Schulze has, as expected, submitted a proposal to acquire the brick-and-mortar retailer, CNET reported Monday morning.

Under the terms of the deal, Schulze, who owns about 20 percent of Best Buy already, would pay between $24 and $26 per share in cash to the company to acquire the outstanding shares he doesn't own, CNET says. If Best Buy were to accept the offer, the company would score a premium of between 36 percent and 47 percent on its Friday closing price of $17.64.

Much of the money will come from what the letter calls “premier private-equity firms with deep experience in retail who are interested in a possible acquisition of Best Buy” and debt financing, Bloomberg reports. The Richfield, Minnesota-based electronics chain had about $1.7 billion in long-term debt as of May 5, according to regulatory filings.

Schulze recently began recruiting executives for his buyout bid.

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Related

Best Buy founder explores potential buyout options

Richard Schulze is reportedly talking with banks and looking for potential buyout partners as he considers taking the beleaguered Richfield-based electronics retailer private, Bloomberg reports. Schuzle is Best Buy's largest shareholder -- controlling 20.1 percent of the company's stock. The 71-year-old abruptly step down as chairman of the board earlier this month to explore his options.

Best Buy founder likely to wield significant influence

Even though Richard Schulze is stepping down, he remains the retail giant's dominant shareholder controlling more than 20 percent of Best Buy stock, according to the Star Tribune. Schulze announced he's resigning as chairman and board director from the Minnesota-based company after an internal investigation found he didn't disclose former CEO Brian Dunn's inappropriate relationship with an employee.

Report: Best Buy founder Schulze recruiting executives for buyout

Best Buy founder Richard Schulze has been recruiting executives to help lead the retailer if his attempt to take the company private is successful, according to a senior Best Buy executive, Bloomberg reports. “He is talking to people he trusts,” J.D. Wilson, senior vice president of enterprise capabilities, said in an interview. “There is a small group he’d like to have with him in righting the ship. He is serious as a heart attack.”

An electric week for Best Buy

Minnesota-based electronics retail giant Best Buy, reeling from a string of bad news in recent months, had another interesting week. On Thursday, founder Richard Schulze cut ties to the company's board. Would he sell his stake in the company, position himself for a private takeover, or something else?

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."

Best Buy bid delayed?

Richard Schulze wants more time before making an offer for Best Buy, the company that he founded. Reuters reports Schulze, who has been working on his offer for months, is expected to take a 30-day extension to mid-December before submitting his final purchase proposal to Best Buy's board. Citing sources close to Schulze, the Star Tribune reported that his bid would come next week.

Ratings agencies among skeptics of Schulze's plan to buy Best Buy

Richard Schulze may have trouble financing his offer to buy up all the shares of Best Buy. He'd need to take on an estimated $7 billion in debt to swing the deal. That prospect led both S&P and Fitch to further reduce Best Buy's already poor credit rating.