Richard Schulze’s deadline for delivering a bid to buy Best Buy (BBY) has been extended until February. Reuters reported that he didn’t have the financing in place yet. The extension gives Schulze and potential financers time to examine the company’s holiday sales before making an official bid.
Best Buy Co., Inc. (NYSE:BBY) has given founder and largest shareholder Richard Schulze more time to consider his bid to buy it out. This comes after Reuters reports that an anonymous source said he didn’t have the financing in place yet.
We reported on Thursday that shares of the company were soaring on the news that Schulze was expected to make a deal with the struggling electronics chain this week. His offer was reportedly going to be around $8 billion, although previous reports had indicated that he was going to bid closer to $11 billion for the chain.
Today shares of Best Buy Co., Inc. (NYSE:BBY) have fallen more than 14 percent. Shares of the company had already started falling in overnight trades after investors heard the greatly reduced $8 million bid expected from Schulze, who is now expected to make his official bid for the company after the holiday season.
The extension granted by Best Buy Co., Inc. (NYSE:BBY) is an important one. As Forbes’ Abram Brown points out, shifting the deadline back to February gives Schulze and any potential financers time to see how the holiday shopping season shakes out for the company. About 25 percent of the retail chain’s revenue came during the holiday shopping season last year.
Currently analysts aren’t expecting great news from Best Buy’s holiday sales. They expect $16.1 billion in sales and only $520 million in profits. The biggest problem the retail chain has been dealing with is showrooming, which basically involves consumers coming into their local Best Buy to see and test out a product and then going home to buy it online, often for less than the store’s price.