Updated from 2:19 p.m. EDT
Darden, owner of chains such as Red Lobster and Olive Garden, will pay $38.15 a share for Rare, a 39% premium over the stock's closing price Thursday. The deal values Rare, operator of the LongHorn Steakhouse and Capital Grille chains, at $1.4 billion including debt. The transaction is expected to close in October.
Shares of Rare closed up $9.87 to $37.38. Darden shares slipped $1.03, or 2.6%, to $38.93.Shares of Whole Foods (WFMI) jumped 7.6% after a judge ruled that it won't block the grocer's purchase of rival Wild Oats (OATS). The Federal Trade Commission had sought to halt the deal under the belief that it would create a natural-foods monopoly. The FTC said Friday afternoon that it will appeal the judge's decision and seek an emergency stay to stop the $565 million merger. Still, shares of Whole Foods closed up $3.13 to $44.30, while Wild Oats closed up $2.71, or 17.8%, to $17.92. Outside of deals, Kohl's (KSS - Get Report) closed 8% higher after posting better-than-expected earnings and lifting the bottom end of its guidance. The retailer posted a second-quarter profit of $269.2 million, or 83 cents a share, topping its own forecast for EPS of 81 cents to 85 cents. Analysts polled by Thomson Financial projected earnings of 82 cents a share.