Amazon Acquisitions

Did Amazon Block Whole Foods From Seeking Other Bidders?

You can dance, but only with us. So said Amazon, in effect, to Whole Foods upon making its bid for that company last month. In other words, Amazon said it would not follow through with its bid in the event that Whole Foods also entertained offers from other suitors.

Reuters reported news that the details were in a filing with the Securities and Exchange Commission, which, among other things, showed how the eCommerce giant used “deep pocket[s] and leverage” to sidestep the lure of a bidding war and win over the supermarket.

That ultimatum came amid a process where Whole Foods had seen interest from two companies and four private equity outfits (the Amazon bid was determined to be higher than what a traditional private equity firm might be able to pay, the filing noted). The firms remained unnamed in the filing. But one company, known as company Y, had been looking to explore commercial opportunities rather than an acquisition. Seeking Alpha said another company, dubbed company X in the filing, would have offered $35 to $40 per share for the grocery store, but not in an all-cash deal.

The acquisition came after pressure from activist investors, such as Jana Partners, to look toward a sale of the grocery store.

As has been reported, Whole Foods stock traded through the $42 offer price given by Amazon, albeit briefly, for a few days after the June 16 deal announcement of the $13.7 billion acquisition.

In addition, the supermarket had wanted an offer at $45. The eCommerce giant said its “best and final” offer was the aforementioned $42 — a bump up from the $41 that had been offered in May.

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