Takeover Targets: Best Buy Makes Big Changes to Shareholder Meeting Requirements

Takeover Targets: Best Buy Makes Big Changes to Shareholder Meeting Requirements

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Rumors have been spreading over the potential buyout of the electronics retailer Best Buy (BBY).  On Wednesday, new developments added some credibility to the gossip…

In a filing to the SEC last week, Best Buy altered their position concerning shareholder meetings.  Before, a shareholder with a 10% stake in the company could call for a shareholders meeting, now someone would need a 25% stake in the firm.

Why would they do this?  It’s possible that founder Richard Schulze is looking for a way to bring the fate of the company under his control.

Earlier this month Schulze offered to step down from his position as chairman, following a scandal involving ex-CEO Brian Dunn having an affair.  Ultimately he decided to postpone that decision and begin exploring options for his $1.3 billion stake in the company.

Schulze is the majority shareholder, but only own 21% of the company, not enough to call a shareholders meeting, but he is still chairman and the founder of Best Buy.

It has been reported that he is working with banks including Credit Suisee to take the company private.  The move by the board seems to be an attempt to keep shareholders from protesting this idea.

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The stock did not take the news well, dropping on Wednesday pushing it down near 20% this year.

Taking the company private and then selling it may be the best option for founder Richard Schulze, but it may not be for the current and prospective shareholders.  Do you think this rumor may become reality, and how will the stock react following a potential announcement?  A lot is still on the table.

Use the Turbo Chart to analyze the performance of BBY compared to the S&P 500:

 

 

 

 

“1. Best Buy Co. Inc. (BBY, Earnings, Analysts, Financials): Operates as a retailer of consumer electronics, home office products, entertainment products, appliances, and related services primarily in the United States, Europe, Canada, and China. Market cap at $6.78B, most recent closing price at $19.81.
 

 

 

(Written by Ryan Horch)

 

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