Ahead of the Bell: Best Buy rises
NEW YORK -- Best Buy Co.'s shares ticked higher in premarket trading after a report said its founder and former chairman Richard Schulze is making some headway with his potential buyout offer of the electronics retailer.
A Reuters story on Wednesday said at least four private equity firms are evaluating Best Buy's financials, a key step before any definitive offer. The story, citing unnamed people familiar with the matter, said the private equity firms include Apollo Global Management, Cerberus Capital Management, TPG Capital and Leonard Green & Partners.
Best Buy and three of the private equity firms did not immediately return requests for comment. Schulze and TPG declined to comment.
In late August, Best Buy agreed to let Richard Schulze and potential buyout partners examine its books. He already owns 20 percent of the Minneapolis retailer's stock, and has suggested that he could pay $24 to $26 per share for the chain.
With a new CEO, turnaround expert Hubert Joly, Best Buy is trying to reverse recent business declines as competition increases and consumers' buying habits change. Best Buy's stores are becoming unprofitable as customers increasingly use them to browse for electronics, then buy them cheaper online. On top of that, shoppers are no longer snapping up big TVs and computers at a fast clip like they used to, instead opting for smaller gadgets like cell phones and tablets.
The company has also suffered abrupt management changes. Former CEO Brian Dunn left in April amid a company investigation into an "improper relationship" with a 29-year-old female employee. Schulze resigned as chairman a month later after the probe found that he knew about the relationship and failed to alert the board or human resources.
Shares rose 48 cents, or 2.8 percent, to $17.45 before the opening bell. The stock has dropped 27 percent this year.