Best Buy Co., Inc. (NYSE:BBY) could be bought out by company founder Richard Schulze, and shares of the company soared in pre-market trades on the news. In pre-trading, the chain’s stock increased 20 percent, and the upward trend continued as soon as the markets opened. The Minneapolis Star Tribune reports that Schulze will make an offer on the Minnesota-based chain by the end of this week.
According to the paper, he has until Sunday to make his bid to Best Buy Co., Inc. (NYSE:BBY)’s board of directors, and reports indicate that he has already arranged for financing. The deal is said to be worth between $5 and $6 billion, which is much less than analysts thought back in October. That’s when ValueWalk reported that Schulze had united a group of private equity firms with the goal of buying out the struggling electronics retail chain, possibly for as much as $11 billion.
Although Schulze founded Best Buy Co., Inc. (NYSE:BBY) back in 1966, he was forced out months ago. With a 20 percent stake in the company, he is still its largest shareholder. So why did Schulze reduce his bid for the company so much? Many believe that his lower bid is likely due to the recent round of negative monthly and quarterly reports. The company’s recent financials indicate decreasing sales and increasing costs.
The retail giant has been struggling to keep consumers coming to its stores, due in part to the rise of online shopping. Amazon.com, Inc. (NASDAQ:AMZN) and eBay Inc (NASDAQ:EBAY), which hold the largest market share of the e-commerce market.