Legal Win Lifts Whole Foods, Wild Oats

Updated from Aug. 17

SAN FRANCISCO -- Shares of Whole Foods(WFMI) and Wild Oats(OATS) were jumping Friday after a federal judge denied the government's request to block the grocers' combination.

Shares of Whole Foods were climbing $2.45, or 6%, to $43.62. Wild Oats soared $2.73, or 18%, to $17.94, approaching the buyout price of $18.50 a share.

The judge rejected the Federal Trade Commission's arguments that the $565 million deal would hurt competition in the organic foods sector and result in price hikes and diminished services for customers.

The ruling marks a significant win for the grocers, but the deal is not yet sealed up. The FTC still has the option to appeal Thursday's ruling, and may seek an emergency stay from either the district court or the U.S. Court of Appeals for the District of Columbia Circuit.

In a statement, the FTC said it is reviewing its options on how to proceed.

Whole Foods Market and Wild Oats Markets have agreed with the FTC to not close the merger prior to noon on Monday. After that, the companies may proceed with the transaction, absent a stay for a pending appeal.

"The District Court's ruling affirms our belief that a merger between Whole Foods and Wild Oats is a winning scenario for all stakeholders," said Whole Foods Chairman and CEO John Mackey in a statement. "We believe the synergies gained from this combination will create long term value for customers, vendors, and shareholders as well as exciting opportunities for team members."