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Best Buy's Founder Bids To Take Over Retailer

Aug 7, 2012
Originally published on August 8, 2012 2:39 pm

Transcript

STEVE INSKEEP, HOST:

Best Buy's founder and former chairman is not happy about the way things are going. That's why Richard Schulze said, yesterday, he wants to buy back the shares he does not already own and take the electronics retailer private. Schulze said he decided to publicly announce this offer because the board was taking too much time with it - could be worth nearly $9 billion in cash.

But as NPR's Yuki Noguchi reports, the deal is being met with some skepticism.

YUKI NOGUCHI, BYLINE: Best Buy has had its share of troubles. An affair with an employee forced out its CEO earlier this year.

Schulze, who founded the company nearly half a century ago, also resigned after he failed to disclose the affair.

Apart from that, Best Buy struggles to manage its roster of giant stores, as it loses business to Web-based competition.

RJ Hottovy, an analyst with Morningstar, says it's not clear from Schulze's open letter, that he has the answer.

RJ HOTTOVY: There wasn't a lot of information in the proposal letter, itself, about what Schulze plans to do with the business.

NOGUCHI: Michael Pachter is an analyst with Wedbush Securities who believes the company's current business approach is fatal.

MICHAEL PACHTER: There is no reason for a dedicated specialty retailer selling commodity products, and that is exactly what Best Buy is.

NOGUCHI: In his statement, Schulze discussed how he plans to finance a deal, but not how he would save the company that sells everything from TVs to washers.

PACHTER: If he had a better idea of how to turn the company around, one would think that would have surfaced in his 45 years on the board of directors.

NOGUCHI: For its part, Best Buy said it will consider the offer.

Yuki Noguchi, NPR News, Washington. Transcript provided by NPR, Copyright NPR.