Aug. 27 (Bloomberg) -- Best Buy Co., the world’s largest electronics retailer, reached an agreement that will allow founder Richard Schulze to conduct due diligence in his effort to acquire the retailer.
Schulze can bring a fully financed proposal to the company within 60 days after the diligence period starts, and if that offer is rejected, he must wait until January 2013 to pursue an acquisition through other means, the Richfield, Minnesota-based company said today in a statement.
The agreement gives Schulze, 71, immediate access to financial information that may help him line up private-equity firms he needs to fund a takeover of the company he founded more than four decades ago and left in June. Best Buy resumed the discussions shortly after announcing quarterly earnings (BBY:US) that trailed analysts’ estimates on Aug. 21, a person familiar with the matter has said.
“The cheaper the stock gets, the stronger a mid-$20s buyout offer looks to the shareholder base,” Matt Arnold, an analyst at Edward Jones & Co. in Des Peres, Missouri, said in an interview Aug. 22. He rates Best Buy hold.
Best Buy rose 5 percent to $18.19 at 9:16 a.m. in New York. The shares had declined 26 percent through Aug. 24.
The board also will offer Schulze, who owns about 20 percent of the shares, control of two board seats because of his ownership, Best Buy said. Schulze would lose the opportunity to control those seats if he violates the terms of the standstill agreement, the company said.
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