Walmart Stores Inc. (WMT) - Get Report might be making a mistake in not besting Amazon.com Inc.'s (AMZN) - Get Report $13.7 billion acquisition of Whole Foods Market Inc. (WFM) .

Reuters reported Friday that Walmart doesn't plan to counter Amazon's offer. Walmart shares dropped 4.7% Friday as investors digested the impact of a combined Amazon-Whole Foods behemoth.

Investors probably thought a bid by Walmart was likely; since the acquisition was announced last week, Whole Foods shares have traded above the $42 deal price, and plenty of analysts have suggested a Walmart bid is possible.

Here are three reasons Walmart may be making a mistake in ruling out a Whole Foods bid.