Natural Foods Merchandiser

Whole Foods extends tender offer

The biggest merger in the history of the natural and organic food industry is still waiting for the Federal Trade Commission to decide whether it will challenge the deal.

In response, Whole Foods Market Inc. announced May 22 that it extended the expiration date for its tender offer to purchase outstanding shares of Wild Oats Markets Inc. for another month, to June 20. It's the third such extension since Whole Foods signed a merger agreement in February to acquire its smaller rival's outstanding common stock for $18.50 a share, or about $565 million.

Austin, Texas-based Whole Foods said in a press release that FTC staff members have voiced "concerns regarding perceived anticompetitive effects resulting from the proposed tender offer and merger."

The Whole Foods press release said the deal is not subject to approval by the company's shareholders. The board of directors for Boulder, Colo.-based Wild Oats has unanimously recommended that its stockholders tender their shares in the offer. The Yucaipa Companies, Wild Oats Markets' largest shareholder with about 18 percent ownership, has already committed to tendering its shares, according to the press release.

The merger, should it get the green light from the FTC, would create a company with combined annual sales of $6.8 billion with more than 300 stores in the United States, Canada and the United Kingdom. The reported impetus behind the deal, in part, is growing competition from private companies such as Trader Joe's and grocery market giants like Safeway Inc., which are greatly expanding their natural and organic offerings.

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