DALLAS (AP) - Whole Foods Market Inc. said Monday it had support from enough
shareholders of Wild Oats Markets Inc. to complete the purchase of its rival,
putting a successful end to a takeover opposed by federal antitrust regulators.
Whole Foods said it would own 84.1 percent of the outstanding shares of Wild
Oats after its tender offer of $18.50 per share closed Monday, and another 12.7
percent were subject to guaranteed delivery over the next three days.
The company said 25.2 million shares of Wild Oats were tendered and not
withdrawn and another 3.8 million shares were subject to guaranteed delivery.
After buying the shares guaranteed for delivery, Whole Foods said it would
acquire all the remaining outstanding Wild Oats shares.
Austin-based Whole Foods announced its $565 million offer for Wild Oats in
February, but the Federal Trade Commission and some consumer groups opposed the
deal, arguing it would result in less competition and higher prices for premium
groceries.
The FTC filed a lawsuit in June to block the takeover, and succeeded in
delaying it for several weeks, forcing Whole Foods to extend its tender offer
several times.
But last week, a three-judge panel of the U.S. Court of Appeals in
Washington denied an FTC request to delay the sale while regulators appealed a
lower-court ruling. The appeals court said the FTC had "raised some questions"
about the deal but failed to show that it would be successful in overturning the
decision of the lower court.
The FTC believed the two chains competed in a smaller market of premium
natural and organic grocers. Its investigation turned up internal Whole Foods
memos in which Chief Executive John Mackey said the acquisition would eliminate
a competitor and avoid "nasty price wars" with Boulder, Colo.-based Wild Oats.
But Whole Foods argued it also competed against big supermarket chains that
sell organic food.
U.S. District Judge Paul L. Friedman sided with Whole Foods, saying that
about 60 percent of natural and organic foods are sold at conventional stores.
Whole Foods declined further comment Monday. FTC representatives did not
return messages for comment.
The announcement of the successful tender offer came after markets closed
Monday. Whole Foods shares gained $1.21, or 2.7 percent, to $45.75; and Wild
Oats shares edged up 2 cents, to $18.48.
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