Ahead of the Bell: Best Buy
NEW YORK (AP) — Best Buy shares rose more than 16 percent in premarket trading on a Minneapolis newspaper report that the electronics retailer's founder will make a fully financed bid of at least $5 billion to $6 billion for the company by the end of the week.
The Star Tribune said Richard Schulze will submit a formal proposal to Best Buy's board before a "hard" deadline of Sunday, possibly on Friday. It says the offer is expected to be at least $5 billion to $6 billion.
The newspaper cited a source it did not name.
A spokesman for Schulze didn't immediately return an email from The Associated Press seeking comment.
Shares of Minneapolis-based Best Buy rose $2.03, or 16.7 percent, to $14.21 in premarket trading.
According to the newspaper, Schulze and his team secured agreements to finance the deal from bankers and private equity investors over the weekend. Schulze will meet with his top advisers in Minnesota on Thursday and Friday, the newspaper said it was told.
Best Buy Co. has been struggling to maintain market share in the face of tough competition from discounters and online retailers. In its most recent third quarter, it recorded a loss due to restructuring charges and continued weak sales.
Meanwhile, the company has been hit with abrupt management changes. Former CEO Brian Dunn left in April amid a company investigation into an "improper relationship" with a 29-year-old female employee. Schulze resigned as chairman a month later after the probe found that he knew about the relationship and failed to alert the board or human resources.