The continuing saga (soap opera) at Best Buy Co. Inc. (NYSE: BBY) just keeps on rolling along. This morning the company announced that it will bring in Frenchman Hubert Joly as the company's new CEO. Joly is regarded as a turnaround expert, having most recently brought travel company Carlson back, after earlier stints with Vivendi's video game business and EDS's operations in France, both since acquired - the video game business by Activision Blizzard Inc. (NASDAQ: ATVI) and EDS by Hewlett Packard Co. (NYSE: HPQ).
But that's probably now what's causing Best Buy's stock price crumble this morning. The company announced over the weekend that it had offered founder and largest stockholder Richard Schulze an opportunity to conduct due diligence in connection with a proposed buyout, but, the company said, Schulze "declined to participate."
For his part, Schulze said today the he was "disappointed and surprised" that his offer to buy the company had been rejected. He is quoted at MarketWatch:
"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," Mr. Schulze said in a statement.
"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."
It could be that Joly's appointment was just a message to Schulze that Best Buy's board is not without options. Nothing against Joly, but the company's weak performance is getting worse and it's hard to see a better offer coming for the electronics retailer. The next offer Best Buy gets, whether from Schulze or another buyer, could well be less than Schulze's $24-$26/share.
Investors are not happy. Best Buy's shares are down about 7% today at $18.84 in a 52-week range of $16.97-$28.52.
Filed under: 24/7 Wall St. Wire, Consumer Electronics, Mergers and Buy Outs, Retail Tagged: ATVI, BBY, HPQ