$Pistol Pete$
7 years ago
$WFM FTC Approves Whole Foods-Amazon Merger -- 2nd Update
Source: Dow Jones News
By Brent Kendall and Heather Haddon
Amazon.com Inc.'s takeover of Whole Foods Market Inc. cleared its biggest hurdle on Wednesday as federal regulators approved the e-commerce giant's big bet on the more than $700 billion food retail market.
The Federal Trade Commission's decision allows the companies to complete their $13.7 billion deal, including debt, and avoid a prolonged antitrust investigation.
Whole Food shareholders also cleared the deal Wednesday, the Austin, Texas-based company said. Amazon shareholders don't need to sign off on the transaction.
The FTC had been conducting an initial review of the deal to see if it might raise any concerns about competition. The commission had the option of examining the transaction in more depth -- a move that have been called for by some Democratic lawmakers, labor and consumer groups -- but the FTC instead decided that further scrutiny wasn't warranted.
"Based on our investigation we have decided not to pursue this matter further," said Bruce Hoffman, the acting director of the FTC's bureau of competition.
Amazon and Whole Foods gave the FTC additional time for a preliminary government antitrust review, a bid that proved successful in heading off a potentially longer government investigation.
Both Amazon and Whole Foods said that they have taken multiple steps to complete the deal and that everything is on path.
A combined Amazon-Whole Foods would have only a small share of the grocery market, making the deal different from the type of mergers that raise red flags when two major competitors seek to join forces.
Whole Foods operates 469 stores and does roughly $16 billion in sales annually, compared with around 25,000 full-service supermarkets in the U.S. generating $440 billion in revenue last year.
Amazon and Whole Foods executives have said that the companies will complement each other. People familiar with Amazon's thinking say the company is likely to lower prices and eventually add additional customer services, such as online grocery pickup.
Some critics, however, expressed concerns that the deal would allow an already formidable Amazon to become more powerful, potentially to the detriment of consumers and the grocery industry.
John Simpson of Consumer Watchdog, a nonprofit that spoke with the FTC about their concerns over the deal, said the group will seek to explore potential challenges on the state level, including by filing complaints with state attorneys general.
"I think it's completely wrongheaded," Mr. Simpson said about the FTC's decision.
The United Food and Commercial Workers International Union, a national labor group that opposed the deal, said it hoped Amazon would protect jobs rather than pushing automation.
Amazon and Whole Foods both want to close the deal by the end of the year. Whole Foods had seen its stock lose more than half of its value as its sales have slumped in the past two years, with mainstream supermarkets starting to sell similar natural and organic goods offerings at lower prices.
The slump prompted activist investors this year to push for board and operational changes at Whole Foods. That pressure drove Whole Food executives to agree to a deal with Amazon, which is seeking to expand its reach into food retail.
The deal is the biggest U.S. retail merger so far this year, and would be the third largest since 1995, according to Dealogic.
Shareholder proxy services Institutional Shareholder Services Inc. and Glass, Lewis & Co. endorsed the merger despite some concerns over a lack of a full sales process. Glass Lewis said increasing competition in the grocery sector and questions surrounding Whole Foods's ability to improve its operations makes the deal beneficial to investors.
Shareholders also approved proposals to decrease the number of publicly traded Whole Foods shares by half, and to allow payouts to company executives under the deal.
ISS expressed reservations about the cash and stock payouts, which amount to $20 million to six officers if they are replaced. But the proxy service recommended shareholders vote for it, given the payouts represent a fraction of the stock value gains under a merger.
Laura Stevens contributed to this article.
Write to Brent Kendall at brent.kendall@wsj.com and Heather Haddon at heather.haddon@wsj.com
(END) Dow Jones Newswires
August 23, 2017 18:41 ET (22:41 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
Phaeton
7 years ago
Amazing move by Jana Partners to sell out of Whole foods for a 300 mil profit in 90 days or less. Now that is speed dating and marriage with a quick divorce
https://www.sec.gov/Archives/edgar/data/865436/000090266417002980/exhibit_e.htm
http://www.businessinsider.com/jana-partners-makes-300-million-return-amazon-whole-foods-deal-2017-7
Who is up next for Jana Partners? I hope its Rite Aid. $RAD
Text book example of how to do it.
https://www.sec.gov/Archives/edgar/data/865436/000090266417001927/p17-0978sc13d.htm
Transactions in Shares of the Issuer During the Last 60 Days
The following table sets forth all transactions in the Shares effected in the past sixty days by the Reporting Persons. Except as otherwise noted, all such transactions were effected in the open market through brokers and the price per share is net of commissions.
JANA
Trade Date Shares Purchased (Sold) Price Per Share ($)
02/09/2017 2,100 29.98
02/09/2017 214,600 30.31
02/09/2017 170,600 30.18
02/09/2017 479,736 30.07
02/10/2017 132,964 30.54
02/13/2017 61,493 30.06
02/13/2017 54,072 30.04
02/14/2017 137,627 29.79
02/14/2017 290,777 29.78
02/14/2017 94,300 29.81
02/21/2017 (35,676)* 31.20
02/22/2017 206,379 31.08
02/22/2017 242,436 31.07
02/22/2017 32,100 31.09
02/23/2017 109,303 31.21
02/23/2017 428,977 31.30
02/24/2017 169,460 31.13
02/24/2017 100,000 31.25
02/27/2017 50,000 30.96
02/27/2017 12,100 31.18
02/27/2017 467,900 31.08
02/28/2017 67,900 30.90
02/28/2017 102,100 30.96
02/28/2017 163,000 30.62
03/01/2017 21,700 30.65
03/01/2017 146,000 30.70
03/01/2017 65,300 30.80
03/01/2017 126,047 30.73
03/02/2017 100,000 30.55
03/02/2017 55,000 30.52
03/02/2017 122,953 30.56
03/03/2017 55,966 29.74
03/03/2017 294,034 29.66
03/03/2017 50,000 30.02
03/03/2017 50,000 29.93
03/06/2017 275,000 29.73
03/07/2017 35,000 29.49
03/24/2017 169,500 29.06
03/28/2017 10,000 28.62
03/29/2017 351,770 28.91
03/29/2017 123,728 28.89
03/29/2017 657,100 28.81
03/30/2017 497,936 29.14
03/31/2017 446,900 29.25
03/31/2017 11,400 29.71
03/31/2017 835,384 29.68
04/03/2017 20,900 29.74
04/03/2017 1,056,714 29.72
04/04/2017 444,812 30.09
04/04/2017 32,900 30.06
04/04/2017 260,148 30.07
04/04/2017 830,642 30.18
04/05/2017 801,368 30.23
04/05/2017 67,300 30.38
04/05/2017 139,000 30.45
04/05/2017 1,701,502 30.40
04/06/2017 117,089 30.71
04/06/2017 1,317,275 30.79
04/06/2017 89,000 30.95
04/06/2017 60,000 30.94
04/06/2017 (183,865)* 30.90
04/07/2017 63,312 31.09
04/07/2017 10,800 31.45
04/07/2017 539,488 31.42
04/07/2017 136,400 31.28
04/10/2017
53,900
31.80
04/10/2017
261,216
31.58
04/10/2017
312,402
31.80
04/10/2017
296,782
31.77
04/10/2017
75,700
31.70
* Transaction was effected for the purpose of rebalancing the holdings of funds and accounts managed by JANA.
Mr. Murphy
Trade Date Amount Purchased (Sold) Price Per Share ($)
03/02/2017 1,250 30.25
03/03/2017 41,236 29.79
03/07/2017 50,000 29.47
03/13/2017 50,000 28.90
03/15/2017 8,735 28.50
Ms. Dietz
Trade Date Amount Purchased (Sold) Price Per Share ($)
03/01/2017 40,000 30.88
03/01/2017 20,000 30.83
03/01/2017 20,000 30.85
03/02/2017 3,000 30.46
03/14/2017 18,000 28.79
Mr. Dickson
Trade Date Amount Purchased (Sold) Price Per Share ($)
03/03/2017 3,375 29.64
03/15/2017 1,900 28.87
Ms. Adler
Trade Date Amount Purchased (Sold) Price Per Share ($)
03/13/2017 837 28.92
03/13/2017 2,618 28.94
Mr. Bittman
Trade Date Amount Purchased (Sold) Price Per Share ($)
03/29/2017 860 29.11
conix
7 years ago
Whole Foods has been forgetting the customer
By Nicole Gelinas
Whole Foods chief John Mackey has finally lost control of his company, which he calls his “baby.” Friday, he sold it to Amazon for 25 percent less than its 2015 value. Irony is, Mackey could’ve avoided this outcome if he’d stuck to the principles of “conscious capitalism” he espouses.
For two years, investors have pressured Whole Foods. Last week, Mackey slammed a hedge fund for pushing him to sell, telling Texas Monthly that “greedy bastards” were “putting a bunch of propaganda out there.” He has a point: many investors want a short-term buck.
But he brought this on himself. His firm committed a common sin: over-expansion during the good times. In 2010, Whole Foods had 299 stores. By last year, it had 456. Demand, as measured by store traffic, has been falling since 2015.
Whole Foods faces tougher competition, too: online purveyors as well as Walmart and Kroger offering organic food.
But Whole Foods’ biggest flaw — one that even agitated investors have missed — is that it stopped respecting its customers. The company can’t deal with busy stores or empty stores.
Take an example of the latter. The store on South Carolina’s Hilton Head Island is vast, shiny and relatively new. It’s also devoid of customers.
The store has dealt with this by taking away what its customers want: perishable food. One day in late May, its fish counter featured one sad cod slab and 12 shrimp. The shrimp were farmed, and from Vietnam.
The clerk duly tried to sell these shrimp — arguing that Whole Foods’ verification system ensured that the Asian shrimp are less polluted that Atlantic shrimp. But other issues aside, this argument doesn’t make sense in the Whole Foods world. The store was saying: Most of our stores have American shrimp, but it’s a good thing we don’t, because it’s polluted.
It also doesn’t make environmental sense to ship frozen shrimp across the planet when the Atlantic Ocean is a 15-minute walk away. So I went to Kroger across the street — which had five types of domestic wild shrimp, and where the clerk, unprompted, told me which one had come in off that day’s boats.
Another problem was apparent on other visits: unpredictability. Sometimes the store had American shrimp, sometimes they didn’t.
OK, so what about a successful Whole Foods — like Manhattan’s Columbus Circle? When the store opened in 2004, it became famous for its crowds and its lines. That was, it seemed, a good thing: People love the brand so much they’ll fight Penn Station-like hordes to stand in line for 15 minutes.
The crowds and lines still exist, sometimes. But the customers look more like they’re lamenting being stuck at a 1990s Kmart because of their own poor daily planning instead of happy to participate in an organic community.
Whole Foods’ aisles are too cluttered with marketing booths and stocking carts, making shopping there stressful. And the way the store manages its lines invites conflict.
People constantly get the numbered system wrong, and go to the wrong register, leaving everyone confused and annoyed.
Inconsistency abounds here, too: sometimes Whole Foods has a clerk to manage the lines, sometimes it doesn’t. Sometimes the store has every register manned and is looking vaguely concerned about its customers’ wait time, sometimes it doesn’t.
The same thing happens at busier stores’ meat and fish counters. The stores can’t manage customer flow, forcing customers into conflict with one another.
As for same-store sales: it can’t help the bottom line that when clerks can’t figure something out, they give up and give the item to the customer. This happens a lot — and with expensive stuff (thanks!).
To be fair, Whole Foods sometimes gets it right, as in Boston, Chicago and London. And — usually — the produce, meat and fish are still better than competitors’.
Mackey, who’ll continue to run the Amazon-owned firm, is one of those CEOs who isn’t satisfied with running a business. He’s out on book tours talking up “conscious leadership” and “value for all stakeholders” and such. But “conscious leadership” might involve incessantly walking your stores
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