Judge refuses injunction in Whole Foods merger with Wild Oats
A federal judge Thursday refused a Bush administration request to stop the proposed buyout of Wild Oats Market Inc. by Austin, Texas-based specialty grocery Whole Foods Market Inc.
The U.S. Federal Trade Commission had sought an injunction to stop the $565 million deal, but U.S. District Judge Paul Friedman disagreed in a 93-page judgment that was sealed because it contained corporate secrets. The FTC claimed the merger would effectively allow Whole Foods to corner the premium and organic retail market, affecting competition and increasing prices for consumers.
Lawyers for the FTC said they would review the agency's options, which could include appealing the decision.
In February, Whole Foods entered into a merger agreement, under which the firm commenced a tender offer to buy all the outstanding shares of the Boulder, Colo.-based Wild Oats for $18.50 per share in cash, plus assumed debt.
The retailer also announced that once the merger was completed, it would sell 35 Henry’s and Sun Harvest stores outlets, and a Riverside, Calif. distribution center.
Whole Foods said at the time that the stores, now owned by Wild Oats, would be transferred to Commerce, Calif.-based Smart & Final Inc. if a proposed merger between Whole Foods and Wild Oats concludes.
The 35 stores, according to Whole Foods Chief Executive Officer John Mackey, 'do not fit into Whole Foods Market’s long-term real estate and brand strategy.'