Best Buy Co. Inc. founder Richard Schulze, who left the board last year and later failed in his effort to take the company private, will rejoin the retailer as chairman emeritus and add two of his former colleagues to the board.
Analysts said Schulze’s move was a recognition that Chief Executive Hubert Joly was having some success with his plans to turn around the electronics chain, which has struggled with increasing competition from online retailers.
Schulze has nominated former Chief Executive Brad Anderson and former Chief Operating Officer Al Lenzmeier to the board, Best Buy said on Monday. Schulze and the company had a prior agreement that let him nominate two directors.
Schulze, who founded Best Buy in 1966, resigned as chairman last June after an internal probe found he had not informed the board of allegations that former Chief Executive Brian Dunn was having an inappropriate relationship with a female employee.
Schulze then tried to take Best Buy private, an effort that fell apart earlier this year.
“This is a better idea, and better for shareholders this way than if Schulze took the company private,” said Morningstar analyst R.J. Hottovy. “In a leveraged buyout transaction you would sell the company for a lot of debt and at this time the company does not have a lot of margin for error.”
Best Buy’s shares gained about 3 cents (U.S.) to $22.82 in early trading. The stock is up 92 per cent in 2013, as investors have grown more confident in Joly’s turnaround plans.
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