In the latest of the ongoing saga of Richard Schulze’s efforts to take Best Buy Co., Inc. (NYSE: BBY) private, the 71-year-old founder of the struggling electronics retailer may have a conflict in the potential buyout with two of his private equity partners, which may be asking for greater control over the company than they originally requested.
The conflict, reported by the New York Post on Friday, citing an anonymous insider, has the potential to scupper the deal as an extended mid-December deadline for making a bid approaches. The newspaper quotes the source as saying the buyout team could be granted a second extension.
The buyers might also be holding out to see how the company fares during this holiday season. If its poor performance continues, the company will be cheaper to buy as the stock price continues to decline.
Three firms had been previously named as Schulze’s main partners and could be making the move together: New York-based Cerberus Capital Management; TPG Capital of Forth Worth, Tex.; and Leonard Green & Partners of Los Angeles. Schulze currently holds a 20 percent stake in the company.
Whatever happens, it’s certain any offer will be lower than the $24 to $26 per share originally speculated this summer. The company’s stock hit its 52-week low a day before Thanksgiving and was trading Friday at below $13 per share after the company reported a lower-than-anticipated sales decline in its third quarter.
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Company CEO Hubert Joly has reportedly said the company’s board would be open to a $20-per-share bid.