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Best Buy: A Takeover Target?

April 18, 2012 | About:
Rumours are circulating about a big for Best Buy (BBY). It is about time! The company is absurdly cheap and the fears of a wholesale shift to Amazon (AMZN) are overblown. I initially wrote about it here.

The Minnesota-based retail giant has become an alluring target for a private takeover, according to industry sources. The nation’s largest consumer electronics chain generates more than $1 billion in cash a year and has relatively little debt. …

A takeover of Best Buy “is on a lot of people’s radar screens,” said Jeremy Brunelli, a retail analyst with Consumer Edge Research in Stamford, Conn. “Best Buy is an obvious candidate. There’s a definite buzz going on.”

Investors are contacting people with connections to Best Buy to seek their help in exploring a buyout bid, a source with close ties to the company confirmed.

“There are people swarming all over this,” said the source, who declined to name those parties.

One name attracting attention is Greenlight Capital Inc., an investor with a record of challenging boards at other troubled companies. Since 2011, the New York-based firm has purchased 7.7 million shares of Best Buy stock, making it the retailer’s ninth-largest investor.
What do you think of Best Buy?

Author Disclosure: Long BBY

About the author:

Frank Voisin
Frank is an entrepreneur who owned four restaurants by the time he was twenty. He sold his businesses and returned to school, completing a concurrent Law / MBA degree. At the same time, he successfully completed all three levels of the CFA exams. He now invests full time with a focus on value investing. Frank Voisin writes about value investing topics at http://www.frankvoisin.com.

Visit Frank Voisin's Website


Rating: 2.7/5 (9 votes)

Comments

onthefringe
Onthefringe - 2 years ago
Still have no clue about this company. Especially since they say they are going to go through restructuring. Will be interested to see the results a year or so form now, and how they compete in the future.
tonysf
Tonysf - 2 years ago


BBY looks like a value trap to me.
BEL-AIR
BEL-AIR - 2 years ago
Thank for the great article Frank...

I would buy BBY if it goes down more, everything becomes a buy at some point.

Please leave your comment:


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