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Best Buy and Schulze in due diligence deal

BY Marianne Wilson

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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Schulze moves closer to Best Buy buyout

BY CSA STAFF

MINNEAPOLIS — Richard Schulze has moved one step closer to achieving his goal of acquiring Best Buy. The company has agreed to let its founder and former chairman access to certain due diligence information and form an invesment group so that he may continue his efforts to attempt to buy the company.

Best Buy stated that the agreement establishes a non-exclusive, orderly process which satisfies the requests made by Schulze, while at the same time protecting the interests of all shareholders. In turn, Schulze said he was pleased with the agreement as well.

Under the terms of the agreement, Schulze, his advisors, potential investors and debt financing sources will have the opportunity to make a fully-financed proposal within 60 days after the due dilegence period begins. In additon, the agreement allows Schulze and his associates to bypass Minnesota law in order to present their proposal to the Best Buy board of directors.



If Best Buy rejects the proposal, Schulze has agreed not to pursue an acquisition until January 2013. However, if the first transaction proposal is rejected, Schulze would have the opportunity to present a second transaction proposal beginning in January 2013. The board of Best Buy would have 30 days to review the second transaction proposal before Schulze would have the opportunity to take an offer directly to shareholders at the 2013 annual meeting or at a special meeting. If Schulze is unsuccessful in getting his offers approved by the board or by the shareholders, then he has agreed not to pursue an acquisition until the expiration of the one year term of the agreement.

Best Buy has also agreed to give Schulze two board seats, so long as he does not violate the standstill provisions of the cooperation agreement.

Best Buy made it clear that there’s no guarantee that Schulze would be successful in making an offer to acquire Best Buy or that the board would accept it.

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Grocery group celebrates industry icons

BY CSA STAFF

The Grocery Manufacturers Association inducted Richard Jurgens, chairman and CEO of Hy-Vee Inc. and Dean Pappas, CEO of Clement Pappas and Company Inc., into its Hall of Achievement.

The recognition came at a gala dinnerSunday night as GMA held its annual executive conference in Colorado Springs.The Hall of Achievement Award represents the highest honor given by the more than 100 year-old association.

“Lifetime achievement is the hallmark of the GMA Hall of Achievement Award, and by that standard, no two people are more deserving than Ric Jurgens and Dean Pappas,” said GMA president and CEO Pamela G. Bailey. “Their business savvy, their desire to make the world a better place and their compassion for their associates, their communities and their consumers sets them apart.”

A 42-year veteran of the company, Jurgens has been Hy-Vee’s top officer since 2006. He has bolstered the Hy-Vee reputation as an industry leader in health and wellness and has made a strong commitment to environmental sustainability. Jurgens served as chairman of the Food Marketing Institute and helped launch the industry’s Healthy Weight Commitment Foundation and groundbreaking front-of-package nutrition labeling initiative. He has also been asked by Iowa Governor Terry Branstad to co-chair the governor’s Healthiest State Initiative, a plan to make Iowa the healthiest state in the nation over the next five years. In December 2011, Jurgens announced his plans to step down from the helm of Hy-Vee in June of this year.

Dean Pappas joined Clement Pappas and Company in 1962. He and his brother, Peter, grew the company to a leader in the supply of private label fruit juice beverages and cranberry sauce to leading wholesalers and retailers throughout North America. Pappas was chairman and CEO until his family’s recent sale of the business in June 2011. Pappas’s long-standing commitment to the CPG industry is evidenced by his 27 years of service on the National Food Processors Association (NFPA), Food Processors Association (FPA) and GMA Boards of Directors, including serving as chairman of NFPA in 2004. He also served as president of the National Juice Products Association and chairman of the Food Institute, New Jersey Food Processors Association, and the New Jersey Farm Workers Corp. This April, Pappas and his wife, Zoe, established the Dean C. and Zoe S. Pappas Visiting Scholar Endowment Fund, with a $1 million endowment to bring renowned speakers to Richard Stockton College.

“The GMA Hall of Achievement Award is presented to the best and brightest in the CPG industry and GMA is proud to honor these two men who have been so successful as business leaders and who have given so much back to the industry and to their communities,” concluded Bailey.

Past recipients of theGMA Hall of Achievement Award includedDoug Conant of Campbell’s Soup, Rick Wolford of Del Monte Foods, AG Lafley of Procter & Gamble, Joseph Pichler of Kroger Co., Robert Rich of Rich Products Corporation and Stephen Sanger of General Mills, Inc.

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