Albertsons Among Six Firms That Vied for Whole Foods -- Update
July 07 2017 - 3:37PM
Dow Jones News
By Heather Haddon
Whole Foods Market Inc. entertained several suitors and sought a
higher share price before accepting Amazon.com Inc.'s offer to buy
the natural-foods grocer.9
Supermarket operator Albertsons Cos. was one of two companies
and four private-equity firms that sought to make a deal with Whole
Foods as the chain fought sagging sales and impatient investors
earlier this year, according to a person familiar with the
matter.
Albertsons and Whole Foods declined to comment.
A financial filing that Whole Foods made to investors on Friday
shed new light on discussions among Whole Foods executives and
advisers over how to handle the multiple bids made in April and
May. The document also suggests that the company and Chief
Executive John Mackey went to great lengths to keep those
negotiations secret, including forgoing a sales process to avoid
publicity.
"Amazon.com was very sensitive with respect to confidentiality,"
the 173-page proxy states.
Amazon declined to comment.
Companies started reaching out to Whole Foods in mid-April,
about a week after activist investor Jana Partners LLC took an
almost 9% stake in the Austin, Texas-based grocer. Jana said at the
time that it wanted Whole Foods to more quickly adopt standard
grocery-industry practices such as loyalty programs and centralized
purchasing to combat a record 18-month stretch of declining
same-store sales.
Another grocer, referred to as "Company X" in the filing, wrote
to Whole Foods that month expressing interest in possible
investment opportunities, and later proposed a merger of equals
that would value Whole Foods at between $35 and $40 a share.
Albertsons executives at the time were aware that Amazon was
also interested in acquiring Whole Foods but couldn't match the
internet giant's offer, said the person familiar with the
deliberations.
"Albertsons couldn't get there from a price perspective," the
person said.
Whole Foods executives didn't pursue the offers from the
private-equity firms because of concerns that they would come in
too low and could generate leaks.
Amazon originally offered $41 a share for Whole Foods in May,
Friday's filing showed. The grocer responded with a proposal to be
acquired for $45 a share. Two days later, on June 1, Amazon raised
its bid to $42 and said it would end its acquisition approach if
the offer wasn't accepted.
Amazon was also considering other bidding opportunities beyond
acquiring Whole Foods, the internet company's representatives
said.
Whole Foods accepted that price, which valued the company at a
total of about $13.7 billion. The deal was announced on June
16.
--Amrith Ramkumar contributed to this article.
Write to Heather Haddon at heather.haddon@wsj.com
(END) Dow Jones Newswires
July 07, 2017 15:22 ET (19:22 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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