Best Buy Founder Sends 2nd Letter to Board: M&A Update
Best Buy (BBY) Founder and Former CEO Richard Schulze sent the retail giant’s board of directors a second letter this week. In it, Schulze reiterated his desire to acquire Best Buy and take the company private. Many investors doubt such a deal will happen, but here’s a look at the letter and the potential implications for Best Buy’s mindSHIFT and Geek Squad businesses, which offer various IT services.
Schulze’s latest letter to the board, dated Aug. 16, stated:
“This is a critical time for Best Buy. The decisions that you make over the next few days and weeks may well determine the fate of this great company. As such, the Board has a duty to ensure it is fully informed about all available options as it seeks to achieve the best outcome for Best Buy and its shareholders.”
Schulze earlier this month offered $24.00 to $26.00 per share for Best Buy, which is struggling to compete against Amazon.com and other online retailers. Best Buy’s board hasn’t expressed much interest in a sale to Schulze. One potential concern: Schulze will likely need to work with private equity firms to secure billions of dollars in funding for any type of highly leveraged buyout.
The board’s reply to Schulze’s latest letter stated:
“Best Buy’s board of directors will review and consider the letter in due course, consistent with its fiduciary duties, and will, as always, pursue the best course for its shareholders.”
Schulze first expressed his desire to acquire Best Buy earlier this month. Will Schulze back down or press forward with the potential takeover discussion? I don’t know. Perhaps more importantly for MSPmentor’s readers: How are Best Buy’s IT services businesses — Geek Squad and mindSHIFT — performing during the M&A chatter?
The short answer: Geek Squad and mindSHIFT continue to focus on their respective missions.
- In recent days, Geek Squad provided clues that it will pursue vertical market IT support services, working more and more closely with various U.S. business associations. Also, Geek Squad partnered with Verizon on Help Desk Services.
- Meanwhile, mindSHIFT recently acquired White Glove — one of Texas’s largest MSPs. mindSHIFT CEO Paul Chisholm has hinted that more M&A deals are coming, along with national growth.
mindSHIFT and Geek Squad certainly are busy, regardless of the chatter in Best Buy’s board room.