Did Amazon accidentally spark a bidding war for Whole Foods?

Whole Foods Market

In connection with entering into the Merger Agreement, the Company has entered into a commitment letter with Goldman Sachs Bank USA, Goldman Sachs Lending Partners LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated, and Bank of America, N.A. for a 364-day senior unsecured bridge term loan facility in an aggregate principal amount of up to $13.7 billion to fund the consideration for the Merger. Whole Foods' footprint is far smaller with about 440 locations, though those are mostly in urban and affluent neighborhoods where delivery might be more in demand. "It really is, for all of you 'cause you not only have opportunities to grow at Whole Foods Market". That fits with Whole Foods private-label push to compete on price, and gives Amazon a bigger foundation on which to develop its own food brands. But Parikh added that activist investors have a stake in Whole Foods.

Mackey is excited to stay on as CEO and noted that the upcoming changes in Whole Foods' leadership will not be "forced" on them by Amazon. He expects Amazon to put pressure on grocery stores to lower prices. Amazon did not respond to a request for comment.

Whole Foods Market, founded in 1978 in Austin, Texas has been a popular name in all households courtesy the natural and organic food items that the grocery chain offered. Meanwhile, share of both Amazon and Whole Foods rose 2.44% and 29.10%, respectively, with Amazon closing Friday at $987.71 and Whole Foods at $42.68.

If shares remain above the acquisition price on the open market, it is very likely that shareholders at Whole Foods will reject the deal. One of the biggest obstacles that stopped Whole Foods from exploding in growth is the exorbitant prices of its products.

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If some other firm is seen as willing to make a higher bid, shares should trade, as we see this morning, at a premium to the Amazon.com, Inc. offer. "They spent about a decade trying to crack the code on fresh food".

Alice Waters is a critically acclaimed chef and sustainability pioneer, so there's no one better to remind Amazon CEO Jeff Bezos that he is responsible for making real change in the food world.

Andrew Gwynn, Exane equity analyst, said Amazon's 13.7 billion U.S. dollars (£10.7 billion) deal for Whole Foods would only increase the chances of Ocado and Amazon working together in the future. That might not be the case if Whole Foods was bought by another grocery chain. Whole Foods will be a lab of sorts for Amazon. If somebody could convince Wal-Mart Stores Inc CEO Doug McMillon to say he has no interest in buying WFM that could go a long way. The technology lets people pay with smartphones without seeing a cashier or going to a checkout kiosk, which would help Amazon differentiate itself in the brick-and-mortar setting and reduce labor costs at Whole Foods stores.

"I think retailers are going to have to bring a lot of excitement to the store", said Stew Leonard Jr., CEO of Stew Leonard's, a grocery chain with five locations in CT and NY.

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