The private equity firms that have been named as potential co-suitors with Schulze are Apollo Global Management (NYSE: APO), Cerberus Capital Management, TPG Capital and Leonard Green & Partners. If these firms are going to compete against Schulze — well, let’s just say that this would be another matter. It would seem likely that any private equity firm would want Schulze involved, but stranger things have happened in the world of M&A.
As a reminder, Schulze has close to a 20% stake and is the largest shareholder in this situation. Best Buy shares are indicated up 4% at $17.66 after closing at $16.97. The market cap is about $5.7 billion as of yesterday’s close, and the 52-week range is $16.25 to $28.53.
Our take is simple. It is unlikely that even a $20 bid will suffice, as that will result in many holders taking a 50% loss. It is likely that $25 will be needed to garner much shareholder support, and even then the firms likely will be sued for acquiring this for too low a price.
JON C. OGG
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