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Buyout firms conduct due diligence on Best Buy

3 Oct 2012

Four private equity firms are conducting due diligence for a possible $11bn buyout of electronics retailer Best Buy, Reuters has reported.

Apollo Global Management, Cerberus Capital Management, TPG Capital and Leonard Green & Partners are looking at the company, following reports in August that company founder Richard Schulze was granted due diligence for his planned private equity-backed takeover of the company.

The 73-year-old’s bid to reacquire the business he set up in 1966 comes after he rejected a due diligence offer from the company.

In August it emerged Best Buy had restarted discussions with its former chairman following disappointing quarterly earnings.

The electronics retailer had previously offered to waiver Minnesota law to allow Schulze to work with his unnamed buyout partners and come up with a definitive proposal for the company’s outstanding shares.

Best Buy’s due diligence offer gives Schulze permission to form an investment group ahead of making a firm offer for the company.

He had previously requested to form a group to acquire Best Buy for between $24 and $26 a share, although his bid received widespread criticism when he declined to name the firms backing him.

Schulze, who owns more than 20 per cent of the company, said he planned to inject at least $1bn of equity from that stake as part of the deal.

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