Whole Foods Finally Swallows Wild Oats
Whole Foods said Tuesday that it has purchased 84.1% of Wild Oats' stock through its $18.50-a-share tender offer, and it plans to buy another 12.7% in the next three days. The remainder of the stock will be purchased via a short-form merger.
The $565 million deal, announced in February, was originally slated to close in April. The Federal Trade Commission, however, attempted to block the transaction on the belief that it would form an organic-foods monopoly.
Whole Foods and Wild Oats contended that traditional chains like Safeway (SWY) and Kroger (KR) already have a significant presence in the natural-foods space. A district court judge ruled in favor of the companies, and the FTC last week lost its request for an emergency stay of the deal."While closing this merger has taken longer than we anticipated, we are very excited to now begin the integration process," said Whole Foods Chairman and CEO John Mackey. "We have found it generally takes up to two years to transition to our decentralized operations and implement our incentive programs," he said. "We expect this acquisition to be similar and that over time we will recognize significant synergies through G&A cost reductions, greater purchasing power, increased utilization of our facilities and new team member talent." Shares of Whole Foods recently were down 53 cents, or 1.2%, to $45.22.
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