Best Buy names Joly CEO as Schulze rejects due diligence offer

Aug. 20 (Bloomberg) -- Best Buy Co. named a new chief executive officer and sparred with founder Richard Schulze, who is trying to acquire the electronics retailer. The stock declined in early trading.

Hubert Joly, CEO of hotel operator Carlson Cos., will take over in September, replacing interim CEO Mike Mikan, Richfield, Minnesota-based Best Buy said today in a statement. Schulze, who had been chairman, left Best Buy in June and is trying to purchase Best Buy for as much as $9.5 billion with the help of private-equity partners.

The appointment of Joly signals Best Buy plans to keep operating as a public company. Schulze declined an offer from the board to access confidential financial information, which would have required him to wait until January to take his bid directly to shareholders, Best Buy said yesterday. Schulze said he was still working on an acceptable agreement with Best Buy and was “shocked” by the company’s statement.

The board has “insufficient information to make a reasonable conclusion” on Schulze’s bid partly because of his failure to disclose financing and equity partners, Best Buy said in its statement. The retailer reports fiscal second-quarter results on Aug. 21.

In a letter last week, Schulze requested the board allow him to form a group to support his proposal to acquire Best Buy for $24 to $26 a share. Schulze, who held more than 20 percent of Best Buy as of June, plans to contribute at least $1 billion in equity from that stake.

‘American Icon’

Best Buy declined 4.5 percent to $19.35 at 8:57 a.m. in New York. The shares had dropped 13 percent this year through Aug. 17.

Joly, 53, said Best Buy’s more than 1,000 U.S. consumer- electronics stores and increasing online sales are “enormous assets” that will help rekindle growth.

“This company is a great American icon,” Joly said today in an interview. “It is a $50 billion company with enormous assets and a great brand name that can innovate and grow in this market.”

Since 2008, Joly has been CEO of closely held Carlson, a Minneapolis-based operator of hotels including Radisson and Country Inns & Suites. Previously, he held various roles at Vivendi SA and McKinsey & Co.

Best Buy in April disclosed the departure of CEO Brian Dunn amid a board investigation into his “personal conduct.”

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