Consumer electronics retailer Best Buy Co. Inc.'s (BBY) Founder and Chairman Richard Schulze, who resigned as chairman and a director earlier than announced, is considering taking the company private and is said to have hired Credit Suisse Group AG (CS) as adviser, according to media reports on Tuesday.
Richfield, Minnesota-based Best Buy, which is also known as the 'big blue box' because of the prominent design on Best Buy stores, had said in mid-May that Schulze will retire as chairman after the 2012 annual meeting on June 21, with long time director, Hatim Tyabji, succeeding him then.
However, he decided to leave the company two weeks ahead of the annual meeting in order to explore all available options for his 20.1 percent ownership stake in the company. He is the largest shareholder of the company.
Schulze, age 71, has served as Best Buy's chairman, CEO and a director for 36 years until 2002. Later, he continued as chairman and a director since 2002. Schulze will now move on to an honorary position of Founder and Chairman Emeritus, and will also serve out the remainder of his term as director through the 2013 annual meeting.
The move to step down from the positions earlier than announced came as an after thought in order to enable him to explore all available options for his ownership stake.
Schulze is currently looking for a leveraged buyout deal to take the company private, with a deal valued at nearing $11 billion, including debt, in order to garner smooth approval from other shareholders for the sale.
As Schulze does not want to run the company anymore, he is trying to preserve the value of his stake in the company by exploring all available options for the company. Even if an outright sale is not possible, he may even look to unload his stake.
However, Best Buy is seen to be arming itself to protect it from any hostile takeover. At last weeks annual general meeting, the company's board voted to raise the minimum threshold of ownership to 25 percent from the 10 percent for a shareholder to call a special meeting for a change of control.
Schulze's decision to step down came after results of an independent probe into the personal conduct allegations involving former CEO Brian Dunn were publicly released.
The results of the probe on Dunn revealed that the former CEO "violated company policy by engaging in an extremely close personal relationship with a female employee that negatively impacted the work environment."
The probe results further revealed that Schulze acted inappropriately when he failed to bring the matter to the Audit Committee of the board in December 2011, when the allegations against Dunn were first raised with him.
Dunn resigned on April 10 prior to the completion of the investigation. He left the company after serving it for the past 28 years. Director Mike Mikan is currently serving as the interim CEO, while a four-member CEO search committee searches for a new CEO.
BBY closed Tuesday's regular trading session at $19.37, up $0.86 or 4.65% on a volume of 17.38 million shares.
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