NEW YORK Best Buy Co Inc's (BBY.N) board nudged founder Richard Schulze on Thursday to name the private equity partners he had lined up to take the consumer electronics chain private, responding to his repeated calls for access to the financial information he needs to secure funding for his bid.
Schulze, the 71-year-old former chairman, might be willing to make a bigger personal investment than he originally proposed, he said on Thursday.
"I still hope to work with the board on a mutually beneficial transaction - but you should know that I am not going away," Schulze said in a letter to the board.
The news came just days after sources told Reuters that several private equity firms that have been approached to join in a buyout of Best Buy were sitting on the fence, citing the lack of a tangible plan by Schulze and doubts about his ability to pull off the deal. <ID: nL2E8J88NY>
Earlier this month, Schulze expressed an interest in buying the struggling retailer for $8.16 billion to $8.84 billion, or $24 to $26 a share. Including the assumption of Best Buy's debt, the total value would be $10.9 billion, making it the year's biggest leveraged buyout so far.
Best Buy, which has called Schulze's proposal "highly conditional," said in an email to Reuters that its board would consider the letter "in due course."
The board is unlikely to do anything significant about Schulze's offer until later this month, when it announces plans to transform the company, two sources close to the matter have told Reuters.
Schulze needs board approval for him and his potential private equity partners to form a group to make a firm proposal without running afoul of anti-takeover statutes in its home state of Minnesota.
But that law does not prevent Schulze from further exploring and engaging in discussions with his private equity partners, and he does not need the consent of the board to bring forward a proposal that names them, Best Buy said on Thursday.
Schulze, who owns about one-fifth of Best Buy's shares, had said he planned to fund the deal through a combination of investments from private equity firms, reinvestment of about $1 billion of his own equity, and debt financing.
On Thursday, he said he was willing to reinvest "potentially" all of his stake, depending on the terms of the agreements with his private equity partners.
The unsolicited proposal comes as the company Schulze founded in 1966 struggles to compete with online and discount rivals and to reduce its own unwieldy size.
Schulze's camp has also been reaching out privately to Wall Street analysts covering Best Buy to explain his side of the story, an analyst who requested anonymity told Reuters earlier this week.
"Clearly they are trying to ... influence the sell-side analysts so we start saying, 'Oh maybe this deal will happen,' that source said.
On Thursday, Schulze said a number of leading private equity firms had said they were prepared to make significant commitments, subject to due diligence. He still did not name the firms.
Best Buy shares were up 1.4 percent at $19.63 on Thursday.
(Reporting By Dhanya Skariachan and Nadia Damouni; Editing by Maureen Bavdek and Lisa Von Ahn)