updated - May 18, 2013 Saturday EDT
By: Isabel Gonçalves
Best Buy Co. Inc. founder Richard Schulze has submitted an formal offer to buy all of the outstanding shares of the company's stock that he does not already own at a price of $24 to $26 per share in cash, according to the Wall Street Journal.
In a statement, Best Buy confirmed it received the letter requesting due diligence and outlining "an unsolicited, highly conditional indication of interest" from Mr. Schulze. Schulze, who held more than 20 percent of Best Buy as of June, plans to contribute $1 billion in equity from that stake, the letter shows.
Schulze stepped down as Best Buy's chairman in May after an investigation found that he knew CEO Brian Dunn was having a relationship with a female employee. Dunn resigned in April.
"I have been actively exploring all available options for my ownership stake," Schulze, 71, said in the letter. "That exploration has reinforced my belief that bold and extensive changes are needed for Best Buy to return to market leadership and has led me to the conclusion that the company's best chance for renewed success will be to implement these changes under a different ownership structure."
Based on Best Buy's 339.9 million outstanding shares, the offer values the company at $8.16 billion to $8.84 billion.
Shulze said he has made repeated requests to Best Buy's board for several weeks to provide him with due diligence information and the consent to form a group required under Minnesota law. He said while he "preferred a private negotiation, time is of the essence."
Best Buy has been making the stores smaller and focusing on its more-profitable products such as mobile phones. It's also trying to combat the so-called "showrooming" of its stores - where people browse at Best Buy but purchase electronics goods elsewhere, especially online.
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