Best Buy Co. founder Richard Schulze says his takeover offer gives the world's largest electronics retailer its best shot at competing with Amazon.com Inc. and Wal-Mart Stores Inc. Bondholders aren't convinced.
Best Buy has $1.5 billion of securities that have a so-called poison put, which requires the company to purchase the notes at 101 cents on the dollar in the event of an acquisition combined with a ratings downgrade. A total of $1 billion of that debt is trading as much as 11 cents below that repurchase price, indicating bondholders believe a buyout isn't imminent.
Talks between Schulze, 71, and Richfield, Minnesota-based Best Buy broke down on Aug. 19 and resumed two days later after the company posted quarterly earnings that trailed analysts' estimates. The retailer has been closing big-box stores and paring jobs to generate savings for promotions and training store employees as it struggles to convince investors that its strategy is still relevant.
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