(By Balaseshan) Best Buy Co. Inc. (NYSE:BBY) founder Richard Schulze repeated his request to the consumer electronics chain's board for accessing financial information, after the board dismissed his acquisition proposal.
In a letter sent to Best Buy's board of directors, Schulze is affirming his commitment to acquisition of the company and urges permission for basic due diligence so that he can present a fully financed offer for the company. He said his need for due diligence is limited to financial data and the standard corporate information necessary to secure financing.
On August 6, Schulze made public his proposal to buy all common stock of Best Buy for $24.00 to $26.00 per share in cash after repeated requests to provide due diligence information and the consent to form a group required under Minnesota law. In response, the board dismissed the proposal as a "highly conditional indication of interest".
"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," the former Chairman said in the letter.
Schulze reiterated that his proposal would be financed through a combination of private equity investment, his own substantial equity investment and debt financing. He believes bold and fundamental changes are needed to return Best Buy to market leadership.
Credit Suisse was also highly confident that 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.
"The transaction I am proposing would be a 'win-win' for all involved. It would deliver compelling value for shareholders through a significant cash premium, provide new opportunities for customers and create a future for Best Buy employees," said Schulze.
BBY closed Wednesday's regular session at $19.36. The stock has been trading between $16.97 and $28.52 for the past 52 weeks.