Eric Wieffering has covered Minnesota's economy and business community for more than two decades. His column appears two to three times a week, including Sunday.

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Best Buy Buyout?

Posted by: Eric Wieffering under Businesses in hot water, Investing Updated: January 5, 2012 - 2:20 PM

Could Best Buy be a great buyout candidate?

Bloomberg floats that possibility, citing the Richfield-based retailer's strong cash flow (thought it remains to be seen how strong that will be after the holiday season, which has featured deep promotional spending).

Here's the nut graf, but the full story is definitely worth a read:

While same-store sales have fallen in five of the past six quarters as demand for televisions slumped and competition from Inc. (AMZN) and Wal-Mart Stores Inc. intensified, Best Buy can still enrich leveraged buyout firms after generating $2.44 billion in free cash in the past year, Telsey Advisory Group and Morningstar Inc. said. The $8.14 billion company could get at least $37 a share in a takeover, according to Thornburg Investment Management, 59 percent more than its price yesterday.

Best Buy declined to comment on the speculation.

Of course, some private equity deals for other retailers - Sears, Musicland, Wilson's Leather, to name just a few - haven't worked out too well in recent years.


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