Newswire: 2 hours ago, Schulze meeting BBY CEO this week
Thomas Lee, Star Tribune (Minneapolis)
Best Buy CEO Hubert Joly will meet with the company's founder, Richard Schulze, this week in the Twin Cities as Schulze moves closer to making an offer to buy the consumer electronics retailer.
Joly and Schulze are expected to discuss ways to recharge the struggling company, according to multiple sources. While the pair have previously crossed paths, this week's meeting will provide the first real chance for the executives to share their points of view about the company in a substantial way, a source close to the situation said.
Top members of Schulze's buyout team -- former CEO Brad Anderson and former president Al Lenzmeier -- also are expected to attend, a source told the newspaper.
Analysts and investors say the meeting could mark a turning point in Schulze's ongoing effort to take over Best Buy, which has roots in Minnesota going back to 1966. The gathering comes just one week after Joly held his first major presentation to investors in New York and just before Black Friday, the official start to the critical holiday shopping season.
"It's an extremely significant meeting given the timing," said Burt Flickinger, managing director of Strategic Resources consulting firm in New York.
A company spokesman acknowledged that the meeting will occur, adding that the timing is not that unusual.
"Dick is our biggest shareholder, and Hubert is the CEO," said Matt Furman, Best Buy's senior vice president of public affairs. "It's not at all surprising that they would meet from time to time, just as they have in the past and just as they will certainly do in the future."
Furman declined further comment.......................
Schulze, who initially said his offer would be somewhere between $24 and $26 a share, doesn't want to overpay since he would need to borrow billions to finance the deal, the source close to Schulze said.. After Schulze announced his intention to buy back Best Buy, he and the board clashed over whether Schulze could raise the money to finance the bid. The two sides eventually struck a deal that would allow Schulze to examine the company's finances and make a second bid in January should the board reject his initial offer.
The meeting with Joly "hopefully shows the board has some sense of urgency to get a deal done at least in principle because there is only a finite time to save [the company]," Flickinger said. The meeting also gives Schulze a chance to size up Joly, who Schulze could consider retaining if he succeeds in acquiring the company. When Best Buy appointed Joly in late August, Schulze initially was skeptical of the former CEO of Carlson, a source close to Schulze said. Schulze tends to gravitate toward people who have worked with him, sources say, which is why he has recruited so many former Best Buy executives to his buyout team, including Anderson and Lenzmeier........