Best Buy announced today that it has reached an agreement with founder Richard Schulze, which will enable Schulze to conduct due diligence, as he tries to acquire the company.
Specifically, he's been granted acces to certain info and permission to form an investment group with private equity sponsors, to help in the process of making a fully financed proposal to acquire the company.
Schulze, his advisors and potential private equity partners and debt financing sources are granted immediate due diligence access to non-public company info, under the agreement. Schulze has been given the opportunity to bring forward a fully financed proposal within 60 days of the due diligence period start date.
According to Best Buy, the agreement establishes a non-exclusive, "orderly" process which "satisfies the requests made by Mr. Schulze, while at the same time protecting the interests of shareholders."
Schulze has agreed not to pursue an acquisition until January at the earliest, should the Board reject a proposal, following the due diligence. The Board would have 30 days to review a second proposal. If Schulze still can't get the Board to accept a proposal, he'll not pursue an acquisition until the expiration of the one year term of the agreement.
The Board has offered Schulze two Board seats, though if he presents a proposal or if he violates the provisions of the agreement, he won't be able to obtain them.
Schulze first announced his intent to acquire Best Buy back earlier this month, when he offered a price of $24.00 to $26.00 per share in cash (about $8 billion).