The board of directors of the consumer electronics firm Best Buy announced on Monday that it had given Richard Schulze, the company founder, consent to prepare a takeover bid. Schulze now has 60 days to perform due diligence, form an investment group and then present a formal takeover bid in order to return the company back to being privately held.
The huge electronics company has been struggling for much of the last year. The board said that if the proposal were rejected then Schulze would not be able to pursue another attempt at a takeover until sometime in January of next year. However, the board did say he could present shareholders with a proposal at the company’s next annual meeting scheduled for January. If a second attempt were also rejected then Schulze would have to wait for a full year before making a third bid.
In 1966, Schulze founded Best Buy and until 2002 was its CEO. He still holds 20% of the stock in the company. He has told the board of directors that he is willing to pay up to $$26 a share for all the stock that is currently outstanding less what he already owns.
Schulze left the company during the early part of 2012 after a scandal took place involving the former CEO of the company Brian Dunn. An investigation found that Dunn had a close personal relationship with one of the female employees at the company. It came to light later that Schulze was aware of Dunn’s relationship with the employee but did not tell the board. The board forced his resignation shortly thereafter.
The chain has over 1,400 stores but posted a loss in its latest fiscal year end of $1.2 billion.