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A buyout of Best Buy Co., Inc. (NYSE: BBY) is looking less and less likely. The process of founder Richard Schulze has just gone on for too long to make much sense at this point. Consider this: How much has Best Buy changed since Schulze was blown out of the company? The answer is a lot, but not to the point that Schulze should be surprised.

In a research report on Monday morning, Bank of America/Merrill Lynch reinstated coverage on Best Buy with an Underperform rating. Even worse, the target is $9.00 against a $12.36 price today. Our take is that it is surprising that a 3% gain would be seen on a downgrade like this but that is the market for you. BofA now believes that Best Buy’s stock is once again trading more on fundamentals rather than based upon the buyout potential.

Richard Schulze is expected to communicate with the Best Buy Board of Directors in December. What looks obvious to an outsider (yours truly that is) is that private equity backers should be very reluctant to get involved in a retailer that is facing a declining story. Would you want to invest in a company that is jokingly called the storefront for Amazon.com?

BofA’s report on Monday even says that the firm believes a deal is less likely to occur due as financing will be difficult to secure and any potential offer will likely be well below Schulze’s original range.

Deteriorating cash flows are going to increase liquidity concerns ahead and a deal to acquire Best Buy could have implied debt put-triggers on the company. Private equity firms are dealing with year-end tax strategies right now and are eager to get whatever they can out of companies at lower tax rates for now. Private equity backers are also smart enough to know that Best Buy shareholders might not go along a buyout now that the share price has slid much further. The shares were closer to $20 when buyout talks were disclosed but now shares are down close to $12 per share.

Richard Schulze should have unloaded his shares and called it a day. With the risk rising that the fiscal cliff is not averted and a recession in 2013, Schulze might still want to just consider what to do with his stock before year-end. How much can this retailer be turned around? Had Schulze punched out closer to $20.00 he still would have had empire-building money. Stepping back in now might not be very rewarding at all.

Our belief is that Schulze should not just walk away from Best Bey. We think he would be crazy to try to buy Best Buy out with a group of private equity firms. Would Schulze offer the same price to Best Buy after the stock tanked just to be a nice guy? Not likely.

JON C. OGG