Report: Best Buy Founder Schulze Taps Former Execs for Buyout
Best Buy Company, Inc., founder Richard Schulze is reportedly recruiting executives to lead the electronics retailer in the event that his private takeover attempt proves successful—and two former Best Buy executives are among them.
Citing unnamed sources, both Bloomberg and the Star Tribune reported on Schulze’s recruitment efforts. The Star Tribune reported that he has tapped former CEO Brad Anderson and former President and Chief Operating Officer Al Lenzmeier to serve on his executive team—and according to a Bloomberg report, Anderson has told other former Best Buy executives that he is interested in joining Schulze’s effort.
Meanwhile, Bloomberg indicated that Schulze has reached out to executives currently working at Best Buy as well.
“He’s talking to people he trusts,” J.D. Wilson, Best Buy’s senior vice president of enterprise capabilities, told Bloomberg. “There is a small group he’d like to have with him in righting the ship. He is serious as a heart attack.”
Wilson told the national news service that his position is being eliminated as part of Best Buy’s recent job cuts. Schulze approached him in June, and he agreed to work for the company if Schulze completes a buyout.
Schulze has reportedly been looking into a private takeover since he resigned from Best Buy’s board in June, about three weeks after he stepped down as chairman. His resignation came after a Best Buy investigation determined that Schulze failed to notify Best Buy’s audit committee after learning about allegations that former CEO Brian Dunn was having an inappropriate relationship with a female subordinate. When announcing his resignation, Schulze also said he was exploring options for his 20.1 percent ownership stake. (Entities that he controls own another 1.1 percent.)
Meanwhile, Dunn abruptly resigned in April, a month before Best Buy’s investigation determined that he violated company policy by engaging in “an extremely close personal relationship with a female employee that negatively impacted the work environment.”
Anthony Chukumba, an analyst at BB&T Capital Markets, told Bloomberg that Schulze would need to raise $1 billion to $2 billion from a private-equity firm and $7 billion to $8 billion in debt in order to stage a takeover. “Lenders are wary in this macroeconomic environment,” he said, adding that a takeover of Best Buy would cost at least $30 a share, for a total value of about $11 billion including net debt, to persuade long-time investors to sell.