Best Buy's Founder Sends Letter to Board; Asks for OK to Conduct Due Diligence

Loading...
Loading...
Richard Schulze, Founder and former Chairman of Best Buy Co., Inc.
BBY
, today 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. The letter follows: August 16, 2012 Board of Directors Best Buy Co., Inc. 7601 Penn Avenue South Richfield, MN 55423 Ladies and Gentlemen: This is a critical time for Best Buy. The decisions that you make over the next few days and weeks may well determine the fate of this great company. As such, the Board has a duty to ensure it is fully informed about all available options as it seeks to achieve the best outcome for Best Buy and its shareholders. On August 6, after repeated requests to the Board to provide me with due diligence information and the consent to form a group required under Minnesota law, I made public my proposal to acquire all of the common stock of Best Buy for $24.00 to $26.00 per share in cash. In response, you dismissed my carefully considered proposal as a “highly conditional indication of interest.” I would have preferred to have a constructive private dialogue with the Board, but once having made my proposal, I was required as a 13D filer to make it public. You can easily test how real my proposal is by granting me permission to form a group and by providing basic due diligence information necessary to present a fully financed offer and allow shareholders the opportunity to receive a substantial cash premium for their shares. I am deeply concerned about the direction of the company and, as Best Buy's largest shareholder, I cannot simply stand aside. I still hope to work with the Board on a mutually beneficial transaction – but you should know that I am not going away. All I am asking is your permission to conduct due diligence and form a group so that I can quickly be in a position to give the Board a fully financed offer for your consideration. My need for due diligence is limited to financial data and the standard corporate information necessary to secure financing. There would be no burden on management as I do not need any presentations to me or potential partners interested in investing with me in Best Buy. I am confident due diligence can be completed quickly. The transaction I have proposed would be financed through a combination of private equity investment, my own substantial equity investment and debt financing. A number of leading private equity firms have informed me that they are prepared to make significant commitments, subject to due diligence. I am prepared to roll over into this transaction at least $1 billion of my own equity -- and potentially all of my existing stake depending on the ultimate terms of the agreements with the private equity firms regarding the new ownership structure. Credit Suisse is also highly confident it can arrange the necessary debt financing, and since August 6, a number of major banks have contacted Credit Suisse to express their interest in participating in the debt financing.
Loading...
Loading...
Posted In: NewsManagement
Benzinga simplifies the market for smarter investing

Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.

Join Now: Free!

Loading...