Whole Foods Buys Wild Oats for $565 Million

While here  at NBN we’ve been predicting the sale of Wild Oats for more than year, last week, when we wrote “sooner or later some mid-size conventional chain will be more than happy (desperate, really) to buy Oats for top dollar little did we guess that the buyer was going to be none other than the big kahuna itself, Whole Foods Market. If only we’d called our stockbroker like our headline suggested.

Hats off to John Macke and crew. On a day when analysts were sharpening their daggers awaiting mediocre to bad quarterly results, Whole Food’s stock rose more than 5%, driven by news of the merger. Same-store sales were down or modest, depending on your point of view, rising just 7 percent, compared with 13 percent a year ago.

The $565 million purchase,  or $18.50 a share, left Oats stockholders with a fat 23% premium over last month’s price. The deal also includes WFM’s assumption of $106 million dollars in debt, part of which NBN assumes include the $25 million dollar loss Oats took after wisely closing three stores late in 2006.  No doubt Whole Foods will be closing more stores, too.

Wild Oats largest shareholder, Ron Burkle and his Yucaipa Group, continued their Midas touch. We’ve <a href=”http://www.naturalbusinessnews.com/levineReport.php?NYSKID=19&dateS=2005-03-29&#8243; target=”new”>”written lots about Burkle’s increasing interest and ownership in Oats”</a> over the last year and NBN wonders if Burkle and his savvy minions greased the wheels of this deal. Stay tuned for more details on this question curious minds want to know.

Initial, though limited reaction in the late night press was positive, stressing WFM’s historic growth through mergers (of course, all teeny, teeny tiny buyouts compared to Oats), as well as the fact that WFM will increase its current limited presence in the Southwest and Pacific Northwest through the deal.

NBN’s initial reaction isn’t quite so rosy but before we issue our verdict, we need some sleep. We’ve been bashing Oats for too long to have the subject of our sniping, as well as the grocery world’s version of a feud worthy of the TV show Dynasty, end in a royal marriage.

We’ll post more on Thursday.

In the meantime we’re trying to think of a joke, here.  Something like a Priest, a Rabbi and a Imam walk into a Wild Oats looking for Oat Bran.  Or maybe a TV movie instead. Something that hints at the rivalry of Sidney Poitier and Spencer Tracy in Guess <strong>Who’s Coming To Dinner</strong>, along with an insouciant dash of that old-time TV classic <strong>My Mother The Car</strong>.

One thing’s for sure.  Whatever the plot, it will have to have lots and lots of fresh produce and artisan cheeses,and some sashimi and grass feed beef served on mizuna greens. And don’t forget olives, lots of olives in different sizes and colors, too.

And instead of a fight in a goldfish pond, that’s too tacky, we’ll have Macke and Burkle wildly celebrate by throwing cash at the customers riding the down escalator at Whole Foods, Columbus Circle.

Anyone know a MOVIE producer?




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