Richard Schulze is considering scrapping his idea to take over Best Buy Company, Inc., after months of speculation that he would make a bid to take the retailer private.
That’s according to a report by The Wall Street Journal, which, citing unnamed sources “familiar with the matter,” said Schulze is weighing the idea of instead lining up investors to take a minority stake in the company.
Schulze, who owns about a 20 percent share, is already the company’s largest stakeholder. The stake he’s reportedly considering buying with an investor group would likely be separate from his existing stake, The Wall Street Journal reported.
Schulze, the Richfield-based company’s founder, announced in August that he was considering making a bid for Best Buy. He and the company’s board subsequently struck a deal that granted him access to the company’s non-public financial information in order to put together a formal buyout offer.
The initial deal required Schulze to make a bid by mid-December, but the deadline was later pushed back to the end of this month.
Sources told The Wall Street Journal that Schulze may ditch the plan because he hasn’t yet received enough support from banks to finance the deal. However, discussions he’s having with investors about taking only a minority stake in the company are reportedly preliminary, and Schulze could ultimately choose a different path, or he could move forward with his initial takeover strategy.
Best Buy recently announced that its same-store sales during the holiday season were essentially flat—welcome news on the heels of several quarters of declines and an announcement that caused the company’s stock price to rise. Best Buy’s stock had been trading up about 30 percent from prior to its holiday sales announcement, but still well below the preliminary $24- to $26-per-share offer that Schulze said in August that he was considering. During after hours trading on Wednesday, the company’s stock was down about 2 percent at $15.12.