Exclusive: Wal-Mart not considering a bid
for Whole Foods - source
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[June 24, 2017]
By Nandita Bose and Greg Roumeliotis
(Reuters) - Wal-Mart Stores Inc is not
actively considering making an offer for Whole Foods Market Inc, a
source familiar with the matter told Reuters on Friday.
Whole Foods, which accepted a $13.7 billion offer from Amazon.com Inc
last week, has not received any rival bids as of Friday, a second source
said. Both sources spoke on condition of anonymity because the matter is
confidential.
Wal-Mart spokesman Greg Hitt declined to comment on whether the company
is considering a bid for Whole Foods. Whole Foods and Amazon did not
immediately respond to requests for comment.
Whole Foods shares have been trading above Amazon's deal price of $42
per share since the deal was announced last Friday, as stock market
investors speculate about the possibility of a higher offer.
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Whole Foods shares reached a high of $43.84 earlier on Friday, but
dropped after Reuters reported that no rival bids have so far emerged.
Its shares were last trading after hours at $42.85.
Wal-Mart had been tipped as a potential bidder for Whole Foods by retail
analysts, although Hitt previously called reports that Wal-Mart might
put in a rival offer "false and baseless."
Wal-Mart, the world's largest retailer, has been investing heavily in
building its e-commerce business and has been acquiring smaller online
companies such as Jet.com, ModCloth, Moosejaw and Bonobos.
"Bidding for Whole Foods would be a 180-degree turn from what Wal-Mart’s
strategy has been for the past two to three years," said Edwards Jones
analyst Brian Yarbrough.
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A general view shows a Wal-Mart store in Monterrey, Mexico, August
10, 2016. REUTERS/Daniel Becerril
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Amazon's proposed purchase of Whole Foods brings disruption to the
$700 billion U.S. grocery sector, a traditional area of retailing
that is in the middle of an intense price war.
In preparation for that price war, Wal-Mart in recent months has cut
grocery prices, improved its fresh food and meat offerings,
modernized shelving and lighting in its grocery department and
expanded its online pick-up service.
Whole Foods' peer Kroger Co, as well as Target Corp and Costco
Wholesale Corp, have also been identified by analysts as potential
bidders for Whole Foods.
Both Amazon and Whole Foods cater to younger consumers, including
millennials, as well as more affluent shoppers.
Whole Foods has said it will continue to operate stores under the
Whole Foods Market brand, and that John Mackey will remain chief
executive.
(Reporting by Nandita Bose in Chicago and Greg Roumeliotis in New
York; Editing by Bill Rigby)
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