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Best Buy Founder Makes $8.5 Billion Bid To Take Company Private
zacharye writes "Best Buy founder and the company's largest shareholder Richard Schulze has offered as much as $8.5 billion to take the company private. Schulze had been rumored to be preparing a takeover offer for some time, and he recently assembled a team of executives that will run the company if his buyout offer is approved. His offer amounts to between $24 and $26 per share, a premium of as much as 47% over Best Buy's stock price at Friday's close."
Title should read "Best Buy Founder Tells World He Will Try To Find $8.5 Billion To Take Company Private"
I doubt he gets it.
Last rumor I heard (here), he would take a golden parachute to escape before BB crumbled.
My AC stalker: " I personally agree with your posts most of the time, but that won't keep me from modding you troll"
Today Best Buy closed at $19.99.
Damn_registrars has no butt-hole. Damn_registrars has no use for a butt-hole.
I thought the founder is always the owner? BB sucks anyway especially their geeksquad scam.
I was only able to scrounge up 8.35 billion (maybe if I check the couch cushions again)...
sold to you
His offer amounts to between $24 and $26 per share, a premium of as much as 47% over Best Buy's stock price at Friday's close..."
Um, SOLD!!
The soylentnews experiment has been a dismal failure.
Title should read "Best Buy Founder Tells World He Will Try To Find $8.5 Billion To Take Company Private"
I doubt he gets it.
I have no doubt that he will.
First he's the founder and billionaire. That means he's got a "track record" among the money crowd.
He will have a plan when he goes shopping for money.
He's the founder who'll rescue the company.
The money guys will be drooling over all the fees, commisions, and every other way they'll make a fortune off of this guy - and they will be right there to help him get his money.
He will can hundreds if not thousands of people, restructure debt, and other things that will stick it up the ass of the working and middle class.
Oh, and he'll probably will NOT have to put up much, if any, of his own money.
Those people live in a different world than you or me. If they get into trouble with debt, the banks kiss their ass and help them to deal with it even if it hurts them. And no one calls them "irresponsible", "free loader" or any of those names. And if need be, some well placed calls to people in Congress and some really cheap taxpayer money will come their way.
They call them "job creators". And if you think he got where he is by hard work and some risk taking, I have a bridge in Brooklyn to sell you.
Now, I'm gonna go cry myself to sleep.
Actually this sort of garbage is why I refuse to go into a Worst Buy
A friend of mine recently had some problems with some SATA cables included with a case in a build he was doing for some family member. Nothing serious. The cables that came with the case were made with flimsy components and were only rated at 3 Gb/s. Rather than risk things he wanted to buy good cables and while he was at it he wanted the 6 Gb/s cables, because hell, why not?
Not only did Worst Buy not have any SATA cables, their 'senior geek squad representative' didn't understand that he didn't want Molex power cables for about 10 minutes. Then they offered to order them for him. Total cost for 2, count them TWO 18 inch SATA cables? $57.63, and it would be about a week before they arrived. Instead, be bought 10 (bulk pricing) cables off Newegg or Monoprice (can't recall) for less than 50 dollars including shipping, and they arrived just under 48 hours after submitting his order.
They are higher quality cables than what he could have ordered through Worst Buy, they arrived faster, it took him less than 3 minutes to make his purchase vs nearly a half hour of frustration, and they fucking glow in the dark.
Is there ANY good reason to go into that hellhole of a store?
Everything there is at least 40% over what it costs everywhere else.
He should have bought it through newegg or amazon, it would save him a few billion.
And you call yourselves relevant? I work with Sikhs everyday, wonderful people. Such a tragedy.
Ohhh but what's important here? Best buy? Free software? NASA?
I thought this was the place for "stuff that matters".
Feh.
How about renting out the geek squad space to 3rd party computer places at cheap prices then renting there own store front
This actually is very interesting. I don't know what the plan is for this, but i do know that being beholden to shareholders has forced many companies to make business decisions that were not very prudent in the long term.
by going private, this would allow Best Buy to alter their current strategy and become more competitive in the electronics marketplace.
no one is going to invest 8.5 billion dollars for something like this without a solid plan. i can think of dozens of ways to improve their bottom line, and i'm sure that people more experienced than i could think of hundreds. what best buy has at the moment is a huge chain (nationwide?) of retail locations that their local demographic typically depend upon for their electronics needs. however, with amazon and probably newegg biting hard into their overhead, this might be part of a strategy to expand their online presence. this would be a move that the shareholders would never agree to, as it would involve short term loss for long term presence - but as a private entity beholden to none, they could make a mint by simply offering electronics online or 'ship to store' at competitive prices by investing in distribution and warehousing facilities
The only explanation I have for this is that someone has stock and needs to cash out. Best Buy is a damaged brand with unprofitable store and unwanted products it's not worth $10 a share.
If there is something you feel feel should be on Slashdot, there is a "Submit Story" link at the bottom of the page. I suggest you use it instead of posting an off topic comment.
I've always considered Best Buy a terrific example to illustrate the quote "No one ever went broke underestimating the intelligence of the American public."
It doesn't have to be about fooling anyone though. They can get quite a lot of business just through desperation... sometimes you need a cable right now, and there's Best Buy.
The problem Best Buy has is that they are starting to stock fewer of those desperation items. I've not been there in years, even when desperate, because it became increasingly unlikely they would have what I was looking for.
"There is more worth loving than we have strength to love." - Brian Jay Stanley
They call them "job creators".
Which is accurate.
You may not like how he comes by his money, or be jealous at how easily he can raise billions of dollars.
But the simple truth is that without someone buying it, Best Buy and all the jobs it offers now will go away in a few years. With a fresh multi-billions of dollars, and a good plan those jobs could be around indefinitely.
"There is more worth loving than we have strength to love." - Brian Jay Stanley
They should just increase operations in emerging economies, Best Buy in Mexico is doing quite well as far as I know, the Guadalajara store payed off in 1 and a half years when the expected best case scenario was 4 years.
In the U.S. they should just decrease brick and mortar stores and move to online retailing.
C-x C-c
You know what would be a smart plan? Re-cast Best Buy as a "test the electronics" store. You charge $50/hour to rent a testing room where you can try any electronics that you like, and a means to easily order from Amazon on the spot.
The store doesn't have to have much stock, or as many employees (since they are not moving a lot of stock around). The would of course also get affiliate commissions from Amazon for all equipment purchased.
The difference is that it would be making money off the way people use Best Buy already...
"There is more worth loving than we have strength to love." - Brian Jay Stanley
Pure speculation based on past observations of other companies:
1) get some money together
2) get the current management on board (their help is needed to take it private).
3) given #2, get the stock to drop more (this step is optional but I just noticed #2 can help).
4) Offer a "premium" over the current price to get shareholders to allow the buyout.
5) Once private, sell all company assets (real estate) to companies owned by the same private investors - dirt cheap.
6) Lease said assets back to company on whatever terms will make the next steps work best.
7) Make some changes to make the company appear better than before
8) Issue new shares to the public to recover the money spent in #4.
9) Try to sustain it long enough to unload all the shares and keep a paying tenant in the buildings purchased in #5.
Since it is the founder this is less likely to resemble their idea of a plan. Let's see who gets on board with him.
I couldn't agree to this fast enough
I went in there, in desperation, looking for a SATA controller. They kid they had on the floor says "oh all the controllers are over here" and took me to the joysticks and game pads.
That was the last time I went into Best Buy for *anything*. I refuse to walk into that store.
Nobodies Prefect
Tidbits for Techs Technology Blog
So what are Best Buy's total assets for all their stores? That's a lot of prime retail space in many places, to say nothing of the huge quantity of electronics.
The guy already owns 20% of the company
That just gave him even more incentive to not let his 20% goes down the drain !!
Plan works like this - He goes in and buys up the entire company, with other-people's-money
Then he "restructures" the company, selling off "non-core-subsidiaries", acquires some other companies and merges them into his now "core-operation", and in the process a lot of employees will see themselves being "made redundant" (ie, fired), before the guy turn around and sell off the whole thing (including his initial 20% stake) to some "investment trust", or something like that
He will end up laughing all the way to the bank, and many employees will end up jobless
That's the way it is, and that's the way it will be.
We are living in a different world now.
"Fairness", "Justice" and "Equality" no longer mean anything
So, if you want to succeed, you must think and act like those in the 0.1 percentile
Muchas Gracias, Señor Edward Snowden !
I predict going private is going to be a bit of a fad in the next 5 years, as a means to capture undervalued primary firms and monetize the next boom. There is a shortage of deals as compared to available idle capital. Note 10 year bond rates and trend.
JJ
"Creating jobs" at Best Buy right now is like hiring people at a buggy whip factory in the 1930s to escape the depression.
Of course Best Buy would not stay as it is. Anyone thinking about buying Best Buy has some kind of plan to try and be profitable, which obviously would be different than what they do now as they are collapsing.
So YES it is job creation, it's the possibility of long term jobs vs. the reality (that you acknowledge) that without a buyer there is will be no Best Buy at some point.
"There is more worth loving than we have strength to love." - Brian Jay Stanley
People are willing to work for a good salary or a good hourly rate.
Drop the hourly rate and the benefits to below living wage, and they have no incentive to work full time, particularly if they can satisfy needs better with the social safety net. Why work if you're still going to bo bankrupt?
Of course, we then say "well then let's drop the value of the safety net so that it's below the wages that are available."
But then you risk another rational choice: criminal activity. Why work legally and go bankrupt if you can work in the gray or illegally and survive? That's where spammers and drug dealers come from.
Most people don't see any particular task as beneath them, but they do see some wage levels as pointless thumb-twirling. You want people to scrub toilets? Pay them an annual wage above the federal poverty level and they'll be happy to. Pay them twice the federal poverty level and they'll whistle while they do it. Pay them at minimum wage or below, and there are very few jobs you can get them to do.
Yes, this picture is incompatible with our macroeconomic situation. But microactors don't care about macroeconomics. They care about making ends meet and accounting to those to whom they are accountable (creditors, utilities, and dependents first amongst these, not "the system").
STOP . AMERICA . NOW
The only reason they "create" jobs is that creating these jobs and hiring people to fill them is the necessary evil to them on their quest for money.
A more ignorant statement of why people start businesses, I could not imagine...
Most businesses are not really started around money, they are started because the owner wants to do something better. That is why I created my own business as a consultant, because I was fed up with how corporate IT did development and I wanted more control over the process of programming.
And yes I did CREATE that job. Before I started my business, there was no job - now it is a job paying for me and my family to exist.
I'm sure you think I am scum now that you know I have my own business, but if I cared what other people thought about anything I'd live a gloomy life indeed.
The thing is, the attitude you exhibit makes me sad because you are the reason the term "wage slave" exists. You have built the cages that keep you trapped in your own pallid existence, with no control over the job you have because you do not understand where they come from.
Wake up and better yourself man.
"There is more worth loving than we have strength to love." - Brian Jay Stanley
Your example is quite literally insane, and the most twisted idea of what a job is I have never seen.
The fact is I have created the job regardless of what the person does. They still get money from me. The job may go to someone else soon, but the job exists independently of the quality of the one that holds it.
Likewise, if you have an existing job that becomes open (employee moves, quits, whatever), hiring a replacement isn't "creating a job".
I cannot help here but brandish the colloquialism DUH DUH DUH DUH DUH.
Hiring a replacement for the SAME FUCKING JOB is not a new job, it's the SAME FUCKING JOB. That someone else created... How can you even use that as an example????
Nothing brings out epic levels of ignorance like discussion of what jobs really are on Slashdot.
I award you no points, and may the Flying Spaghetti Monster find something of worth in you to add to the Great Sauce.
I will respond no more on this topic, you may feel free to type as vigorously and foolishly as you will. I just hope that someday you understand the reality of how jobs are created so that you can benefit rather than be entrapped by the system in which we all live.
"There is more worth loving than we have strength to love." - Brian Jay Stanley
You sound like you know what you're talking about, but everyone else is saying otherwise.
He went in with a "high confidence level" letter, not a "we will finance" letter. That means he doesn't have a plan.
The overwhelming consensus is Best Buy needs to slim down - cut the number of stores and make remaining stores smaller. He wants to grow - more stores, and supersize them all.
He has no plan (that anyone's seen) on how to "restructure debt" as you put it.
Shareholders are thought to want >$30 buyout, not $25. To those people saying "but the stock is only trading at $20 right now", look at the recent history. 52 week high is at $28.53. In late 2010 it was pushing $45.
And really, the rhetoric about getting bailed out by his friends in Congress is getting old. Whether you like it or think it stinks, big banks control the world's finances. If they had gone down, you'd have seen an Italy or a Greece but 20 times bigger. The car companies have SO MUCH in the way of dependencies (not just employees but entire external industries that exist for no other reason than to provide parts for GM) that the ramifications of them going south was thought, quite fairly, to be scary as all hell. Best Buy - ehh, not so much.
The reason he got ousted was because he was thought to have not reacted appropriately to a scandal in high places. This was very, very recently. Yes, he's got a track record. In these circles, however, there are some things you just don't do. Having an affair isn't one of them. Failing to react when your C-level exec has an affair and gets caught - that's a no-no.
When he goes to make his purchase of BBY stock, will he do what BBY customers do and look up the item before buying?
He's offering $26 a share. I bet Amazon has it for $12, Newegg for $13 and Monoprice for $1.87 in five colors.
Ah the sweet irony if this could happen. Not only is BBY cornered by arguably better competitors, the competitors even sell the company itself for less.
Yeah this works best as a joke on a late-night TV monologue.
Sig for hire.
I'll ignore the high prices since it's really not that difficult anymore to find reasonable alternatives to Best Buy. But there is one section of their store that we seriously need to get on the ball against.
The "geek squad". It's not the workers fault, it's the stupid ass companies fault for not requiring training. I've seen people get hired onto the "geek squad" that can barely even use a computer on their own. Majority of my new customers for computer repair come from people that have went to the "geek squad" and got majorly ripped off. People pay hundreds of non-refundable dollars to them just to get one of a couple things: spyware/virus scan, windows reinstalled, or told to buy a new computer. I have to wonder how many people were fooled by the last bit there and threw out a working computer that had problems any reputable computer repair tech could solve in minutes.
There is also the matter that any reputable computer repair tech should be teaching their customers basic maintenance and upkeep (driver updates, dusting, etc). The most they do toward that end is give you a pamphlet that is full of misconceptions, poor advice, and fear propaganda. If they really cared about repairing a computer that pamphlet would be filled with user maintenance instructions, steps to take to isolate what's causing a problem, or at the very least instruct owners to keep notes on what problems happen and when they happen.
Nice way to bump up the price of the stock, make an announcement, price goes up, cash in on shares, change your mind and voila. Not saying that this is how it's going to happen with BB, I'm just sayin'...
Bullshit. It's depositors and the flow of money that matter, not the banks or bankers. If BOA and Citi had gone under and their executives gone to jail, depositors would still have their money and would still be able to get loans from other banks.
Furthermore, all the bailouts did was make the banks less willing to lend money at reasonable rates, as they sat on every dime in an effort to keep themselves solvent.
Comment removed based on user account deletion
Schulze is putting up a one billion dollar equity stake:
http://online.wsj.com/article/SB10000872396390444246904577572842651243850.html
Schulze is worth an estimated two and a half billion:
http://en.wikipedia.org/wiki/Richard_M._Schulze
-kgj
Please take it private. Better yet, close it! I'll never darken its doorways again, and you can take that to the bank!
Circle the wagons and fire inward. Entropy increases without bounds.
Yes, I was serious... in relation to more recent stories, they could even host Amazon Lockers there. Instead of ordering from traditional Best Buy and getting it in a week you come in the next day to pick it up.
Literally, if you can't beat 'em, join 'em.
Perhaps I'll go arrange financing of a billion dollars and just start up said stores myself, since everyone else thinks it's such a lark. They won't be laughing in five years when they must PAY to enter my abode... :-)
Plus I would totally continue the spirit of 200% markup on cables you were desperate to have that day, although I would not push magical properties upon them... just note how handy it would be to buy that cable right now with the TV you just got.
I'd even post comparable inline prices right next to the cable to let them know exactly what was going on. What are they gonna do, wait a day?
"There is more worth loving than we have strength to love." - Brian Jay Stanley
Looking at stockchase it looks like Best Buy is pinging between don't buy and top pick. Their price also has been pinging between 16 and 18 dollars.