Private Bid Option for Best Buy may just speak to How Bad it Really Is
Best Buy has been having an extremely difficult year and reports of founder Richard Schulze requesting board approval to bid for private acquisition of the company, may show just what level of difficulty they have reached. The company which has recently announced layoffs and restructuring, as well as had Schulze step down in June; continues to battle an economy, market, and consumer base that has favored online shopping over the traditional retail outlet.
The request for bid as mandated by Minnesota Law; was presented in a letter to the board from Schulze and may just be a sweet deal for current investors in the company, considering the continuously falling stock price. Currently the stock is trading in the high $19 range but does not appear to have any positive momentum. Schulze would like to form a bidding group and has estimated a bid for the company between $24 and $26 per share which is a significant premium for the company.
The board has yet to approve the request and has made it known that it may have difficulty, considering the fact that it is seeking out a new CEO. Timing would seem to be everything though, as the stock price continues to fall, the parameters around a private bid as well as the ability for Schulze to get the interest and credit necessary to submit the bid, makes timing imperative.
Given the variables and the state of the company, this may be the only chance Best Buy has to save some investors from a big loss and potentially give the company a fighting chance. The impending outlook for Best Buy is not good otherwise, and the once retail giant may just find itself the way of Circuit City and Good Guys in the history books.