NEW YORK (AP) -- The founder and former chairman of Best Buy could try to take the company private, as reports have suggested, but that's one of the most difficult options he could pursue with his 21 percent stake in the electronics chain, an analyst said Wednesday.
Late Tuesday, a report in the Wall Street Journal said that out of the myriad possibilities founder Richard Schulze is considering, he would prefer to take the company private. The report cited unnamed people familiar with Schulze's thinking.
Schulze and Best Buy Co. declined to comment on the matter.
The chain's founder is by far the largest holder of Best Buy shares. The second-largest holder, the mutual fund manager Fidelity Management & Research Co., has 6.9 percent.
On Wednesday, Caris & Co. analyst Scott Tilghman laid out the options that Schulze has besides a buyout. He could sell his shares, keep his stake and do nothing else, boost his holdings to 25 percent so he could convene a special shareholder meeting or seek a partner to help him obtain a 50 percent stake in order to gain control of Best Buy without buying the entire company.
A buyout is unlikely because it would be expensive, Tilghman said. He predicted that Best Buy shareholders would want $30 per share in a deal, or $8.1 billion for the shares Schulze doesn't already own.
"The list of potential suitors is short given the size of such a deal," Tilghman said.
Best Buy is facing tough competition and a changing retail landscape that threatens its "big box" stores. That plus the uncertain global economy may make investors wary of buying the company for $8.1 billion, Tilghman said.
He kept his "Average" rating and $21 price target on the stock.
Best Buy shares rose 51 cents, or 2.6 percent, to $19.88 in late afternoon trading. The stock had dropped 17 percent since the beginning of the year.
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