Best Buy Co Inc’s (BBY.N) former Chairman Richard Schulze is not expected to present a buyout or other proposal to the company’s board anytime soon, a person familiar with the situation said, putting a damper on market expectations that a move might be imminent.
Shares of electronics dealer Best Buy rose more than 10 percent on Monday morning to $23.56 on growing talk that Schulze was planning a buyout offer, but fell back to $22.13, or up 5.6 percent, on word the bid was unlikely to come soon.
Discussions around a leverage buyout are still in the early stages, the person said.
Schulze, who founded Best Buy and still owns more than 20 percent of its shares, abruptly resigned from the company’s board in June and said he was exploring options for his ownership stake. He lost his chairman title after a probe by a board committee found that he had failed to tell the board about allegations that former CEO Brian Dunn had engaged in an improper relationship with a female employee.
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Sources told Reuters last week that Schulze was working with banks, including Credit Suisse (CSGN.VX), to explore a potential private takeover of the world’s largest electronics retailer. The Minneapolis Star Tribune first reported that Schulze was working with Credit Suisse.
Credit Suisse declined to comment on Monday. A representative for Schulze and Best Buy declined to comment.
Investors could be looking for a trade into what they may consider a short-term “win-win” scenario, where either Schulze makes a buyout offer or the company presents an aggressive turnaround plan, said Brian Sozzi, chief equities analyst at NBG Productions, in New York.