Whole Foods acquires Wild Oats following close of tender offer

By Lisa Kerner

Charlotte, N.C., Aug. 28 - Whole Foods Market, Inc. purchased 25,175,997 shares, or about 84.1%, of Wild Oats Markets, Inc.'s stock in the $18.50-per-share tender offer that ended on Aug. 27 to complete its acquisition of the company.

An additional 3,795,973 shares are subject to guaranteed delivery. In total, 96.8% of Wild Oats' common stock will be purchased under the tender offer.

Whole Foods will acquire all of the remaining outstanding shares of Wild Oats in a short-form merger, making Wild Oats its wholly owned subsidiary. Wild Oats stock will cease trading on Nasdaq.

In addition, Whole Foods assumed some $137 million of Wild Oats' existing debt, net of cash. To fund the transaction, Whole Foods got a five-year $700 million senior term loan agreement and signed a new five-year $250 million revolving credit agreement to replace its existing $200 million revolver.

It was previously reported that Whole Foods and Wild Oats entered into a merger agreement on Feb. 21, 2007, and the tender offer was originally set to expire on March 27.

"While closing this merger has taken longer than we anticipated, we are very excited to now begin the integration process," Whole Foods co-founder, chairman and chief executive officer John Mackey stated in a company news release.

"We have found it generally takes up to two years to transition to our decentralized operations and implement our incentive programs. We expect this acquisition to be similar and that over time we will recognize significant synergies through G&A cost reductions, greater purchasing power, increased utilization of our facilities and new team member talent."

Whole Foods said it is selling all 35 Henry's and Sun Harvest stores and a Riverside, Calif., distribution center to a wholly owned subsidiary of Smart & Final Inc. in a transaction slated to close in September.

Wild Oats is a chain of natural and organic food markets based in Boulder, Colo., and Whole Foods is an Austin, Texas-based natural and organic foods retailer.

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