Struggling electronics retailer Best Buy Co., Inc.(NYSE:BBY) may eventually get a buyer in its founder Richard Schulze, but the bid price is expected to come in below his initial proposal of $8 billion, Reuters reported on Friday.
The bid is also not expected to be made before December, the report said citing sources.
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"Schulze has done most of his due diligence on Best Buy and has formed a business plan to turn around the world's largest consumer electronics chain, with his efforts now focused on securing financing commitments," the sources told Reuters.
Schulze will not be making his bid alone but is expected to be joined by private equity firms - Apollo Global Management LLC, TPG Capital LP and Leonard Green & Partners LP, though it is not clear how much each of the entities are bringing.
The entire deal value has been estimated at between $8.16 billion and $8.84 billion translating into $24 to $26 a share.
If debt is also included in the deal then the value of the deal could go up to $10.9 billion, the report said.
Best Buy has been struggling for some years now especially with customers using its stores as a kind of showroom for products which they eventually buy at online stores such as Amazon and other retailers.
Schulze, who founded the company in 1966, was ousted from the board after his protégé Brian Dunne was forced out as the CEO earlier this year on allegations of having inappropriate relations with a female employee.
"While a final decision on the offer price has not been made, the drop in shares has raised the likelihood that Schulze's bid could be below $24 per share, Reuters said, adding that the share prices of the company have dropped nearly a fourth this year.
Schulze is expected to take a 30-day extension to mid-December for submitting a final proposal to Best Buy's board, the sources told Reuters.