Electronics retailer Best Buy has been having a difficult time recently with sagging profits and other challenges. Best Buy founder Richard Schulze has been working with at least four different private equity firms to examine the books of the ailing retail giant. The reason Schulze is digging through the books is that he is leading an attempt to take Best Buy private with a possible buyout.
Reports indicate that Schulze and the private equity firms working with him could offer as much as $11 billion for Best Buy. Reuters reports that the private equity firms working with the Best Buy founder include Apollo Global Management LLC, Cerberus Capital Management LP, TPG Capital LP, Credit Suisse Group AG, and Leonard Green & Partners LP. Sources indicate that at the same time Schulze, who owns 20% of Best Buy, is pouring through the books he’s also negotiating with these private equity firms on what his role would be after the potential buyout.
Schulze and the private equity firms also have come to agreement on exactly what would become of his 20% stake in the electronics retailer. Reuters reports that the process is in the early stages and no decisions have been made yet according to its sources. The sources also stated that the private equity group wasn’t likely to offer a buyout proposal before the middle of November.
Schulze has previously stated that he could buy Best Buy for $24-$26 per share. That share price would value the company between $8.16 billion and $8.84 billion. When debt is added in the buyout could cost as much as $10.9 billion.