Richard Schulze owns 20% of Best Buy and offered to buy the shares he does not own for between $24 and $26 per share, a premium of as much as 47% to Friday's closing share price.
Shares in the retailer surged 12.9%.
Best Buy has been struggling in the face of competition from online sellers.
In the year to March, Best Buy swung into a loss of $1.23bn, compared with a gain of $1.28bn the previous year.
"There is no question that now is the moment of truth for Best Buy and that immediate and substantial changes are needed for the company to return to its market-leading ways," Mr Schulze said.
"It is my strong belief that Best Buy's best chance for renewed success is to implement with urgency the necessary changes as a private company."
Chief executive Brian Dunn resigned in April, citing the firm's poor results.
Mr Schulze left in May, after it was found he knew Mr Dunn was having an affair with a female employee but did not disclose it to the audit committee.
Its inquiry found Mr Schulze acted inappropriately when he found out about the relationship.
Close personal relationships are against company policy.
Mr Schulze founded Best Buy in 1966 and it grew to to be the US's biggest consumer electronics retailer.
It tried to enter the UK market, but pulled out last year, selling some of its stores to Morrisons.
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