(Reuters) - Best Buy Co Inc (BBY.N) founder Richard Schulze may scrap a buyout bid and instead line up investors to take a minority position in the electronics retailer, sources familiar with the situation said on Wednesday.
The latest twist in Shulze’s months-long quest came two weeks before the deadline set by Best Buy for him to make a bid for the company he founded in 1966.
Schulze originally informed the board last August that he was interested in teaming up with private equity partners to buy the company. He has been unable to get enough support from banks to finance a deal to take it private, three sources said.
He is in preliminary talks with investors to take a minority stake in the chain that would be separate from his own existing position of about 20 percent, two of those sources said.
Best Buy declined to comment on the news, first reported by The Wall Street Journal. Its shares tumbled more than 10 percent on the initial report, then bounced off session lows to close down 2 percent at $15.12 on the New York Stock Exchange.
Best Buy forced out Schulze’s protégé, Brian Dunn, as chief executive last year amid allegations he was having an inappropriate relationship with a female employee.
That scandal led to the ouster of Schulze from the board. Best Buy hired restructuring expert Hubert Joly as CEO to turn around the company. Schulze remains Best Buy’s largest shareholder.
Best Buy, which has struggled to fend off its discount and online rivals, showed the first concrete signs of a turnaround in its U.S. stores recently when it reported flat same-store sales during the holiday season.
Reporting By Jessica Toonkel, Dhanya Skariachan and Olivia Oran; Writing by Ben Berkowitz and Dhanya Skariachan Editing by Andre Grenon, Leslie Adler and David Gregorio