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Best Buy founder quits board, may sell off 20.1% stake in firm

The founder and outgoing chairman of Best Buy announced his resignation from the board Thursday and said he may sell off his 20.1 percent stake in the beleaguered electronics retailer.

It's the latest news to hit the Minneapolis company facing increasing competition from online retailers and a CEO scandal, and it removes one obstacle for a possible private equity takeover of the company. Shares fell nearly 8 percent in morning trading but ended the day down 1 percent.

Richard Schulze, 71, has been with the company since its inception in 1966 and is its largest shareholder. The second largest holder, Fidelity Management & Research Co., has a 6.9 percent stake in the company.

"There is an urgent need for Best Buy to reinvigorate growth by reconnecting with today's customers and building pathways to the next generation of consumers," Schulze said. "Accordingly, I have shared my views with the board and today informed them of my decision to resign as chairman and a director, effective immediately, in order to explore all available options for my ownership stake."

He initially announced in May that he would step down June 21 at the company's annual meeting after an investigation found he knew that then-CEO Brian Dunn was having an inappropriate relationship with a female staffer. At the time, he said he would remain as chairman until after the company's annual meeting and as a director through the 2013 annual meeting.

Thursday, he said he would walk away from both of those positions, effective immediately.

Best Buy said Hatim A. Tyabji, currently chairman of the audit committee, will replace Schulze as chairman immediately, rather than after the annual meeting as previously announced.

"Schulze is an iconic entrepreneur, and the board offers its deep appreciation for his enormous contributions and service as Best Buy's founder and chairman," the board said in a statement.

Schulze willingness to sell his stake removes a major obstacle should any private investment company make a bid for the company, said Morningstar analyst R.J. Hottovy.

Best Buy is facing increasing competition from Internet retailers and discount stores as the so-called "big box" model of retail becomes outmoded. It is trying to combat the so-called "showrooming" of its stores: people browsing at Best Buy but purchasing electronics goods elsewhere.

Shares of Best Buy slid 19 cents, to $19.70 Thursday, after dropping $1.55 earlier in the day.

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