Best Buy: A Big Deal to Watch in 2013

NEW YORK (TheStreet) -- With a 'fiscal cliff' looming and reports of a lost year in holiday season retail sales, dealmakers face an uncertain outlook for 2013 after a forgettable year in mergers and aquisitions.

Still, with earnings and stock markets continuing to trend upward alongside a recovering U.S. economy there's reason for optimism that the New Year may revive animal spirits and push corporations and private equity giants into acquisitions.

Investors should watch a near half-year takeover drama for struggling electronics retailer Best Buy(BBY) as a proxy for the M&A market headed into 2013.

A possible takeover could confirm the key expected drivers of the deals market, such as private equity and access to cheap buyout or merger financing. Meanwhile, a Best Buy buyout could also signal demand for blockbuster turnaround deals, amid a handful of beaten down former blue-chips like Research In Motion(RIMM) , Dell(DELL) , and social media busts such as Groupon(GRPN) and Zynga(ZNGA) .

Were no Best Buy deal to materialize after a takeover dance that started in early August, it could counter expectations that private equity giants will play an outsized role in M&A markets and might underscore the impact of the Fiscal Cliff and weak signs of holiday season sales on C-Suite aggression.

After Best Buy founder and former chairman Richard Schulze proposed a $24-to-$26 a share takeover of the electronics retailer -Schulze has yet to make a formal offer - Best Buy's shares have fallen sharply on two disastrous earnings reports that show cash and earnings falling, amid online market competition and a weak market for PC-based products.

After delays to a prospective takeover offer, Schulze and a still suspect consortium of private equity giants will have until February 28 to submit a real bid that could give investors and the company's management something to think over. So far TheStreet has criticized Schulze for slow playing a deal at the expense of ordinary investors.