Hedge fund called 'greedy bastards' by Whole Foods CEO would make $300 million on sale

[June 17, 2017]  By David Randall

NEW YORK (Reuters) - Jana Partners, the hedge fund that Whole Foods Market Inc <WFM.O> Chief Executive John Mackey lambasted as "greedy bastards," stands to make roughly $300 million from the sale of the grocery chain to Amazon.com Inc <AMZN.O>.

Activist hedge fund Jana, led by Barry Rosenstein, disclosed a nearly 9 percent stake in Whole Foods in April. The hedge fund held 26,074,830 shares purchased at an aggregate price of about $794.5 million as of May 27, 2017, a filing with the U.S. Securities and Exchange Commission showed.

Amazon said on Friday that it would buy Whole Foods for $13.7 billion.

Jana, Whole Foods' second largest investor, had been pushing the company to perform better and add directors with experience in retail, technology, finance and real estate. It was widely reported that Jana was pressing Whole Foods to consider a sale.

Whole Foods did not embrace Jana's suggestions. In May, it named a new chief financial officer and five independent directors who had not been on a slate proposed by Jana.

"We need to get better, and we’re doing that," Whole Foods Chief Executive John Mackey told Texas Monthly in an interview this month.

Barry Rosenstein, founder and managing Partner of JANA Partners LLC., speaks during the Sohn Investment Conference in New York May 4, 2015. REUTERS/Brendan McDermid

"But these guys just want to sell us because they think they can make forty or fifty percent in a short period of time. They’re greedy bastards, and they’re putting a bunch of propaganda out there, trying to destroy my reputation and the reputation of Whole Foods because it’s in their self-interest to do so."

Jana Partners did not respond for a Reuters request to comment.

Amazon has agreed to pay $42 per share in cash for Whole Foods, a 27 percent premium on its closing share price on Thursday. Shares of Whole Foods closed at $42.68 on Friday, up 29 percent or $9.62.

Assuming the deal closed at $42 per share, Jana's stake would be worth $1.09 billion.

(Reporting by David Randall; Editing by Jennifer Ablan, Toni Reinhold)

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