Best Buy and its largest single shareholder, Richard Schulze, its founder and ousted chairman who wants to buy the struggling consumer electronics chain for around $9 billion - $24 to $26 a share - have smoked the peace pipe.

Best Buy is going to let Schulze form an investment group with interested private equity folk and do due diligence.

It's an about-face for the board although it's not making any guarantees it'll buy his proposal. Punters, however, pushed Best Buy stock up around 5.5% to $18.26 at the prospect of some easy money.

Best Buy is giving Schulze 60 days to put a fully financed definitive proposal on the table. The clock starts when his people get access to the company's numbers.

It's not clear Schulze can raise the money, but he certainly couldn't without due diligence.

As part of its statement the board said, "If a transaction is proposed and the board of directors rejects such proposal, Mr. Schulze has agreed not to pursue an acquisition until January 2013. However, if the first transaction proposal is rejected, Mr. Schulze would have the opportunity to present a second transaction proposal beginning in January 2013. The board of Best Buy would have 30 days to review the second transaction proposal before Mr. Schulze would have the opportunity to take an offer directly to shareholders at the 2013 annual meeting or at a special meeting. If Mr. Schulze is unsuccessful in getting his offers approved by the board or by the shareholders, then he has agreed not to pursue an acquisition until the expiration of the one-year term of the agreement."

The board is prepared to give Schulze, who owns 19.6% of the company, two board seats provided he respects the agreement's standstill provisions.

Best Buy just hired a new CEO. Its profits also just dropped 90% and it withdrew all guidance. Schulze has said he wants to move fast before Best Buy crumbles. It's lost sales to Amazon, Target and Wal-Mart.