Calls to mergers and acquisitions bankers have seen a significant boost this summer, with retailers requesting that they put out feelers to Amazon in the hopes that they might be the next acquisition for the online retail giant.
The Financial Times reported news that investors, analysts and consulting firms are also engaged in an elaborate guessing game, trying to figure out which companies might be on Amazon’s radar, as Chief Executive Jeff Bezos has shown an interest in brick-and-mortar stores.
“Everything is Amazon these days,” says a senior consumer and retail banker in New York, who asked not to be named.
The idea of reaching out to a single potential buyer certainly worked for Whole Foods in terms of an acquisition. The company’s executives, under pressure from investors, called Amazon after they saw a media report suggesting the online retailer had considered buying their company. Amazon went on to acquire Whole Foods for $13.7 billion earlier this year.
“All these desperate retail companies think that the solution to their problems will be solved by [Jeff] Bezos … they are all praying for a new ‘Amazonian’ era of retail … in which they are members of the [Bezos] club,” says another banker.
Aaron Turner, analyst at Wedbush Securities, says the company could potentially acquire GrubHub, the fast-growing U.S. food delivery startup, for about $4.5 billion. The deal would give Amazon a network of 50,000 restaurants and nearly nine million active diners.
“This is not imminent by any means,” said Turner. “But clearly [Amazon] is laser-focused on food, specifically perishable food.”
Other analysts have, however, leaned toward big box retailers such as Bed Bath & Beyond or Target that could help Amazon build out a physical store network. And higher-end or specialty retailers such as Nordstrom, Warby Parker or Lowe’s would also be good options, says CEO Jeff Glueck from Foursquare, who studies store foot traffic patterns. Nordstrom shoppers are twice as likely as the average person to shop at Whole Foods, while Warby Parker, the trendy eyewear retailer, would help capture coveted millennial consumers.
But some industry veterans aren’t convinced Amazon is even looking to make another merger — at least right now.
“Amazon is on its own path and will not just keep on buying for the sake of it,” says a banker working in the retail sector. “Historically, they have been deal shy and anyone thinking that they will be saved from Amazon is wrong.”