Wal-Mart Said to Steer Clear of Making Rival Bid for Whole Foods

Updated on
  • Retail giant isn’t considering offer, person familiar says
  • Amazon agreed to buy Whole Foods for $13.7 billion last week
Photographer: David Paul Morris/Bloomberg Inc.’s path to acquiring Whole Foods Market Inc. looks clear.

Wal-Mart Stores Inc., one of the few retailers with the resources to mount a counteroffer, doesn’t plan to make a Whole Foods bid, according to a person with knowledge of the matter. That leaves Amazon with few likely rivals after its $13.7 billion deal to buy the organic grocer on June 16.

Amazon is paying $42 a share in cash for Whole Foods, a 27 percent premium to the stock price before the transaction was announced. Since then, the shares have traded around $43, a sign that investors were anticipating a competing offer.

But those hopes began to fade on Friday. Reuters was first to report that Wal-Mart wasn’t making a counterbid, sending Whole Foods stock down 0.6 percent to $42.95. No other bidders have emerged since last week, Reuters said.

Another person familiar with the situation told Bloomberg that Whole Foods has had a quiet week in the wake of the Amazon bid, suggesting that a bidding war isn’t imminent.

The list of companies that could potentially challenge Amazon is short, said Jennifer Bartashus, an analyst at Bloomberg Intelligence. And for Wal-Mart, buying Whole Foods probably never made sense, she said.

“It seemed highly unlikely,” Bartashus said. “Wal-Mart’s strategy is to invest in e-commerce -- that’s where their money is going right now.”

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