Whole Foods buys Wild Oats Market

Whole Foods buys Wild Oats Market

	Published : Wed, 21 Feb 2007 23:02 By : Agencies Print this Story

AUSTIN, Texas (AP) - Natural foods retailer Whole Foods Market Inc. said Wednesday it is buying its rival Wild Oats Market for about $565 million.

Under the deal, Whole Foods will pay $18.50 per share for the company and will assume all of Wild Oats' debt, totaling about $106 million.

The company said the share price is a 23 percent premium to the one-month average closing price of the stock. Wild Oats shares closed Wednesday at $15.72. The share price is a 17.7 percent premium to that closing price.

Whole Foods said it will fund the buy with $700 million in senior term loans and will enlarge its long-term senior revolving credit facility to $250 million.

Whole Foods Chairman and Chief Executive John Mackey said the acquisition will help the store compete with larger players that don't only sell natural and organic food.

'Wild Oats Markets will be our largest acquisition and is a great geographical fit as all of our 11 operating regions will gain stores and three of our smallest regions -- our Pacific Northwest, Rocky Mountain and Florida regions -- will gain critical mass,' Mackey said. 'We will also gain immediate access into a significant number of new markets.'

Wild Oats operates 110 stores in 24 states and British Columbia, Canada. Whole Foods said some Wild Oats stores may be closed or relocated if they overlap with stores Whole Foods already has in development.

The chain said it will also make 'significant investments' in remodeling the Wild Oats stores.

The Wild Oats board of directors and the company's largest shareholder, Yucaipa Companies, have already approved the deal. It does not need to be approved by Whole Foods shareholders.

The company said it would begin a tender offer for all of Wild Oats outstanding common stock Feb. 27.

Whole Foods shares rose $2.26, or 4.9 percent, to $47.76 in aftermarket electronic trading. Shares closed down 37 cents at $45.70 on the Nasdaq Stock Market.

Wild Oats shares added $2.63, or 16.7 percent, to $18.35 in after-hours trading. The shares closed down 6 cents at $15.72 on the Nasdaq.