Piper Jaffray Maintains Neutral on Best Buy

Piper Jaffray published a research report on Best Buy BBY and reiterated its Neutral rating and $22 price target. In the report, Piper Jaffray wrote, "This morning, news sources reported that BBY founder Richard Schulze sent a letter to Best Buy's board offering to take the company private at $24-$26/share. We note the letter is not a formal take-out offer, but is a request to conduct due diligence and to form a group of private equity funds and former BBY executives in order to make a more complete offer at a later date. While financing for an offer appears to be lined up, and Schulze brings a 20% ownership stake, we continue to believe a final deal is unlikely. Projecting out BBY's business for the next 5-10 years is a difficult exercise given the uncertainty of product cycles and the ongoing disintermediation within the industry (i.e. Apple's direct-to-consumer model). As a result, we continue to believe Mr. Schulze will have difficulty finding private equity partners to support his takeout offer." Best Buy traded Monday up almost 13 percent at $19.91.