Moody's puts Whole Foods under review |
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Thu, 22 Feb 2007 22:26
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NEW YORK (AP) - Moody's Investors Service said Thursday it placed Whole Foods Market Inc.'s ratings under review for a possible downgrade, after the natural foods supermarket chain announced a $565 million deal to buy rival Wild Oats Markets with borrowed funds.Whole Foods unveiled the deal to buy Boulder, Colo.-based Wild Oats Markets, a smaller chain of natural foods markets in the U.S. and Canada, after the market closed on Wednesday. Whole Foods will pay $18.50 per share in cash and assume about $106 million in the debt -- financed with a new $700 million, five-year bank term loan.Moody's placed its Whole Foods corporate, issuer and subordinated ratings under review as a result.The ratings agency said the review will focus on Whole Foods' plan to integrate Wild Oats, as well as its plans to raise sales and profit margins. Moody's also will look at the risks associated with the company's increased debt portfolio.Also Wednesday, Whole Foods reported an 8 percent decline in fiscal first-quarter profit.Investors largely applauded the deal, sending shares of Whole Foods up $6.41, or 14 percent, to close at $52.11 on the Nasdaq Stock Market. The stock has traded in a 52-week range of $42.13 to $74.Copyright 2007 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
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