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Best Buy to acquire Future Shop
Market Action
KEY NUMBERS
TSE 300 .00 7632.70
CDNX .00 3073.06
DOW +44.42 10460.33
Nasdaq +12.60 1994.80
As of 9:35 EST Prime Rate: 6.00%
US$: $1.53893 Cdn$
TORONTO (CP) -- Future Shop (Quote|Profile), Canada's largest national retailer of consumer electronic products, has agreed to be taken over by a large American company for $580 million Cdn.
Best Buy Co. Inc. (Quote), the largest U.S. retailer of technology and entertainment products, will acquire all outstanding Future Shop shares for $17 each.
Inwest Investments holds about 69 per cent of Future Shop's outstanding shares and has agreed to tender them to Best Buy.
The transaction, which is subject to regulatory approval, is expected to be completed late next month.
"This acquisition accelerates by several years our goal of becoming North America's premier retailer and eventually the leading global retailer of technology and entertainment products and services," Richard Schulze, CEO and founder of Best Buy, said in a statement Tuesday.
He said Best Buy intends to grow Future Shop's revenues, store count and employee base.
"We continue to anticipate that we will meet or exceed analysts' expectations for our second quarter and fiscal year earnings," Schulze said.
The Burnaby, B.C.-based Future Shop will operate as a separate Canadian subsidiary of Best Buy.
Future Shop is Canada's largest national retailer of consumer electronic products with 88 stores. It employs more than 7,000 people.
Best Buy is based in Minneapolis and is the top specialty retailer of consumer electronics, personal computers, entertainment software and appliances in the U.S.
Hassan Khosrowshahi, who founded Future Shop in 1982, will relinquish his roles as CEO and chairman, the company said.
"Best Buy's financial strength, reputation and retailing expertise is a winning combination for our employees, shareholders and customers," said Khosrowshahi.
Kevin Layden, president of Future Shop, is expected to continue as president of Future Shop, reporting to Brad Anderson, vice-chairman of Best Buy.
Layden spent 17 years with Circuit City Stores Inc., before joining Future Shop in 1997.
Thomas Healy, former president of Best Buy Canada, will become president of Best Buy International, once the transaction is finalized.
Healy, who joined Best Buy in 1990, previously worked on the company's Canadian expansion plans.
In May, Future Shop reported its best-ever year with earnings of $32.4 after a 42-per-cent rise in fourth-quarter earnings.
Last month, the company said it intended to fight off the American electronics retailer by opening an additional 30 stores. Best Buy was expected to enter the Canadian market with 60 stores.
Market Action
KEY NUMBERS
TSE 300 .00 7632.70
CDNX .00 3073.06
DOW +44.42 10460.33
Nasdaq +12.60 1994.80
As of 9:35 EST Prime Rate: 6.00%
US$: $1.53893 Cdn$
TORONTO (CP) -- Future Shop (Quote|Profile), Canada's largest national retailer of consumer electronic products, has agreed to be taken over by a large American company for $580 million Cdn.
Best Buy Co. Inc. (Quote), the largest U.S. retailer of technology and entertainment products, will acquire all outstanding Future Shop shares for $17 each.
Inwest Investments holds about 69 per cent of Future Shop's outstanding shares and has agreed to tender them to Best Buy.
The transaction, which is subject to regulatory approval, is expected to be completed late next month.
"This acquisition accelerates by several years our goal of becoming North America's premier retailer and eventually the leading global retailer of technology and entertainment products and services," Richard Schulze, CEO and founder of Best Buy, said in a statement Tuesday.
He said Best Buy intends to grow Future Shop's revenues, store count and employee base.
"We continue to anticipate that we will meet or exceed analysts' expectations for our second quarter and fiscal year earnings," Schulze said.
The Burnaby, B.C.-based Future Shop will operate as a separate Canadian subsidiary of Best Buy.
Future Shop is Canada's largest national retailer of consumer electronic products with 88 stores. It employs more than 7,000 people.
Best Buy is based in Minneapolis and is the top specialty retailer of consumer electronics, personal computers, entertainment software and appliances in the U.S.
Hassan Khosrowshahi, who founded Future Shop in 1982, will relinquish his roles as CEO and chairman, the company said.
"Best Buy's financial strength, reputation and retailing expertise is a winning combination for our employees, shareholders and customers," said Khosrowshahi.
Kevin Layden, president of Future Shop, is expected to continue as president of Future Shop, reporting to Brad Anderson, vice-chairman of Best Buy.
Layden spent 17 years with Circuit City Stores Inc., before joining Future Shop in 1997.
Thomas Healy, former president of Best Buy Canada, will become president of Best Buy International, once the transaction is finalized.
Healy, who joined Best Buy in 1990, previously worked on the company's Canadian expansion plans.
In May, Future Shop reported its best-ever year with earnings of $32.4 after a 42-per-cent rise in fourth-quarter earnings.
Last month, the company said it intended to fight off the American electronics retailer by opening an additional 30 stores. Best Buy was expected to enter the Canadian market with 60 stores.
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