Best Buy founder Schulze rejoins as chairman emeritus

Mon Mar 25, 2013 3:28pm EDT
 
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By Dhanya Skariachan

(Reuters) - Best Buy Co Inc (BBY.N: Quote) 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.

The news helped dispel rumors the top investor in the world's largest consumer electronics chain was contemplating selling his stake in the company he founded in 1966. Best Buy shares rose as much as 3 percent on Monday.

"We view today's announcement as a clear positive for Best Buy, as it suggests that Mr. Schulze is unlikely to sell his 20 percent stake in the company at any point in the near future," Barclays analyst Alan Rifkin said.

Rifkin said Schulze's return was likely to be "a huge morale boost," citing his popularity among the company's employees.

One former investor, who sold his shares recently after a run that saw the stock nearly double in the first quarter, said it was only good news as long as Schulze did not meddle with new Chief Executive Hubert Joly.

"It's Richard's way of saying I am still involved in the business," said Frank Lombardi, a portfolio manager at Boston-based Cubic Asset Management. "I don't think it's useful. Hopefully it's not detrimental to the business. But I think they will sort of stay somewhat passive for now and allow the business to be run by Joly."

Schulze, who had a prior agreement with Best Buy that let him nominate two directors, resigned as chairman in June after an internal probe found he did not inform the board of allegations 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.   Continued...

 
A Best Buy logo is seen during Thanksgiving Day in San Francisco, California, November 22, 2012. REUTERS/Stephen Lam