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Best Buy founder drops plan to take company private

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Best Buy store nyc (STOCK)
Best Buy store nyc (STOCK)

Best Buy and its co-founder Richard Schulze have ended talks without reaching a deal. In a statement, Best Buy said that "the deadline by which Mr. Schulze could make an offer to acquire the company expired yesterday... The company received no such offer and will continue to focus on its transformation for the benefit of all of its stakeholders." Schulze resigned as Best Buy chairman in May 2012; soon after, he began talks to take the company private. That plan now appears to have fizzled, though sources tell The New York Times that discussion could resume at a later point.

Even if they did, though, it sounds like a buyout is off the table. "Any prospect of a full takeover of Best Buy had disappeared several weeks ago" after Schulze's group decided it did not want to take on the debt required, writes the Times. For the past weeks, discussions instead reportedly centered on Schulze increasing his current 20 percent stake in Best Buy. There seems to be little chance that Best Buy will follow in the footsteps of Dell — which was taken private by its founder and CEO in February.

Update: On its call, Best Buy provided a bit more detail, saying that Schulze's firms had proposed greater investment in the company. "The cost of these investments was determined to be excessive and deleterious to our existing shareholders. Therefore, our company decided to not accept these offers." Reuters reports that the proposed investment at one point reached $1 billion.