Best Buy and Schulze in due diligence deal

Minneapolis -- Best Buy Co. announced Monday that it has agreed to let founder and former chairman Richard Schulze conduct due diligence and form an investment group with private equity sponsors as he tries to take the retailer private.

Best Buy said its agreement with Schulze establishes a non-exclusive, orderly process that satisfies his requests and protects the interests of shareholders.

Schulze said he was pleased by the agreement, which follows more than a week of negotiations between the two parties. Schulze has proposed buying the company for up to $8.8 billion. But Best Buy has been cautious, and has emphasized a turnaround effort that will be led by its newly announced incoming CEO, Hubert Joly.

Under the  terms of the arrangement, Schulze will get access to non-public information and can propose a fully financed bid within 60 days after the due diligence period begins. In certain circumstances, the period may be extended.

The agreement also calls for the waiver of a Minnesota law in order to allow Schulze to work with private equity partners.

Should a transaction be proposed and the board rejects it, Schulze has agreed not to pursue an acquisition until January 2013.

Best Buy is offering Schulze two seats on Best Buy’s board, though he cannot hold onto them if he takes an offer directly to shareholders or if he violates his agreement.

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