Best Buy Names CEO as Talks with Founder Stall
Aug 20th 2012 5:52AM
Best Buy Co. Inc. (NYSE: BBY) plans to name CEO Hubert Joly of the hospitality company Carlson as its new chief executive, according to DealBook. This announcement ends the electronics retailer's months-long search for a new leader, following the departure in April of former CEO Brian Dunn. And it is expected to be the first of several disclosures the company will make to assure investors that the struggling electronics retailer can turn around its fortunes on its own.
Joly is expected to join Best Buy in early September. Best Buy is likely to provide further details on its turnaround plans when the company reports earnings on Tuesday.
Separately, the company said that it had responded to a second letter from founder Richard Schulze in which he asked for permission to begin performing due diligence to support a potential bid for the company of $24 to $26 a share. Under the terms of Best Buy's proposed agreement, the board would have waived a provision of Minnesota corporate law that would allow Schulze to formalize a group of partners to support any deal, and it would have allowed him to bring forward a fully financed deal within 60 days. If the board declined Schulze's offer, he would be free to take any offer directly to Best Buy's shareholders after Jan. 1.
Schulze reportedly was unhappy with some of the proposed terms and rejected the offer. After the company's announcement that he had rejected its proposal, he issued this statement:
I am disappointed and surprised by the Best Buy Board's abrupt termination of our discussions. For the record, we engaged in good-faith negotiations with Best Buy's Board and its advisors over the weekend and expected to conclude this matter before the Company's earnings announcement early this week. The Board initially proposed an 18 month standstill, which was completely unacceptable in light of the fact that urgent change is needed at Best Buy and value is eroding further every day that change is not effected. We were in the process of negotiating an acceptable standstill period when, without notice to me or to any of my advisors, the board issued its announcement. I am shocked by this course of action but as the largest shareholder of Best Buy, I remain hopeful that the Board will engage in good faith discussions with us for the benefit of shareholders, employees and customers. Time is of the essence, and it is imperative that shareholders' interests are not further jeopardized.
Filed under: 24/7 Wall St. Wire, Corporate Governance, Management Change, Mergers & Acquisitions, Retail Tagged: BBY