Best Buy Company Incorporated agreed to extend the deadline to February 28 for founder Richard Schulze to make a bid for the company, continuing the uncertainty for shareholders over whether he can put a bid together.
Reuters reported that Best Buy shares fell 14.2 per cent to $12.12 on the New York Stock Exchange.
The company said on Friday the extension would allow Schulze to include the consumer electronics retailer's full-year results as part of his due diligence review.
The new deadline will also give him more time to line up partners and financing for a bid. A source told Reuters on Thursday that Schulze didn't have financing lined up in time for a December bid.
Schulze, who founded Best Buy in 1966, has said he would fund any deal through a combination of private equity and debt financing, as well as the reinvestment of some of his own equity in the company.
"Obviously with the extension, there is still some hesitation on the part of his private equity suitors about how much financing they would want to put up for this deal," Morningstar analyst R J Hottovy said.
Under the extension, Schulze will be able to submit an offer any time during February, and the company will have 30 days to review and make a decision on the bid.
In August, Schulze made an informal proposal to acquire Best Buy for $24 to $26 per share, or a total of $8.16bn to $8.84bn. Including debt, it would be as much as $10.9bn.
But Best Buy's performance has continued to lag and its stock has slid since. Last month, the company reported a decline in same-store sales for the ninth time in the last 10 quarters.
Best Buy's fortunes have faltered as consumers increasingly use its big box stores as showrooms for products they end up buying online at Amazon.com Incorporated and other websites.
To add to its troubles, the company forced out Schulze's protégé, Brian Dunn, as chief executive earlier this year amid allegations he was having an inappropriate relationship with a female employee.
That scandal led to the ouster of Schulze from the board, and Best Buy hired turnaround expert Hubert Joly as CEO to come up with its own restructuring plan.
Schulze remains Best Buy's largest shareholder with about one-fifth of the company's outstanding shares.
If he can come in with a bid at about $16 or $17 a share when the market thinks the stock is only worth $12, it is in the interests of shareholders to extend the deadline, Hottovy said.
