Best Buy reported a loss of $409 million for the last quarter; the company said restructuring charges and weak sales are to blame for the significant loss. The fourth Quarter results come a day after the company ended talks with its largest shareholder and its founder.
Best Buy Co., Inc. (NYSE:BBY)revealed that it has received no offers from the Richard Schulze for the takeover and will continue working on its turnaround. Thursday was the deadline to submit the offer.
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The retailer said the deadline has expired, and Schulze has not presented any bid for the, much talked, takeover. People familiar with the matter said, the group, which includes private-equity investors and Schulze, asked for three board seats in exchange for acquiring a minority stake in the company.
In August, Schulze came out with an announcement to acquire Best Buy Co., Inc. (NYSE:BBY) for $24 to $26 a share, but failed to acquire the necessary financing needed. The talks between Schulze and Cerberus Capital Management LP, TPG Capital and Leonard Green & Partners for a smaller deal ended, according to the sources.
The world’s largest consumer electronics retailer was founded by Schulze more than 40 years ago. Schulze is the biggest shareholder of the company with about 20 percent stake. He resigned as chairman in June last year and was replaced by Hubert Joly. The new CEO has since improved sales by working on e-commerce operations, closing big-box stores and expanding smaller outlets.
“[Schulze] took his ego out of his pocket and put it on his sleeve and said, ‘I can run this company better,’” Michael Pachter, an analyst at Wedbush Securities in Los Angeles. “He couldn’t get other people to back him.”
Schulze attempts to take over the company started two months after an inquiry alleged him for failing to inform the board about the inappropriate relationship of the CEO at that time with an employee.
“This is how the deal ends. Not with a bang, but with a whimper,” Erik Gordon, a business and law professor at the University of Michigan in Ann Arbor. “Schulze never made a compelling case for going private.”
Best Buy Co., Inc. (NYSE:BBY) offered two board seats as a part of their standstill agreement with Schulze, which includes, Schulze will not go to the shareholders directly with the proposal and will not violate standstill provisions.
The shares of the company jumped 38 percent this year after dropping 49 percent in 2012.