Best Buy plans to give its founder a reprieve from holiday shopping.
The electronics retailer said on Friday that it would give its founder, Richard Schulze, until Feb. 28 to make a takeover bid for the company. That will give Mr. Schulze and his private equity partners the chance to review holiday sales before making their bid.
Best Buy cautioned that its founder may not make a bid, and that it may turn down any offer that is made.
Shares of the retailer tumbled nearly 17 percent in morning trading on Friday, to $11.75, as investors appeared worried that the chances of a successful takeover were growing remote.
Mr. Schulze remains the single biggest shareholder, with a roughly 20 percent stake, but analysts and investors have questioned whether he can line up the requisite equity and debt financing.
He has reached tentative agreements to partner with a number of leveraged buyout firms — currently including Cerberus Capital Management, Leonard Green & Partners and TPG Capital — to aid him in his campaign, a person briefed on the matter said. But any offer is unlikely to come close to the $8.8 billion that he initially floated.
The announcement comes as shares in Best Buy have fallen steadily in recent months, down 33 percent over the last three months. Even with the holiday shopping season in full swing, the retailer is expected to struggle against online competitors like Amazon.com and bigger rivals like Wal-Mart Stores.
Analysts suspect that consumer will continue to use Best Buy stores as “showrooms” to play around with products, before buying them more cheaply elsewhere. That’s despite efforts by the company’s relatively new chief executive, Hubert Joly, to entice shoppers with redesigned stores and improved customer service.
The company said last month that its same-store sales fell yet again, as it reported a $10 million loss in its third quarter.
DealBook: Best Buy Gives Founder More Time to Make a Bid
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DealBook: Best Buy Gives Founder More Time to Make a Bid
