Whole Foods Market Inc. entertained several suitors and sought a higher share price before accepting Amazon.com Inc.'s offer to buy the natural-foods grocer.9
Supermarket operator Albertsons Cos. was one of two companies and four private-equity firms that sought to make a deal with Whole Foods as the chain fought sagging sales and impatient investors earlier this year, according to a person familiar with the matter.
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Albertsons and Whole Foods declined to comment.
A financial filing that Whole Foods made to investors on Friday shed new light on discussions among Whole Foods executives and advisers over how to handle the multiple bids made in April and May. The document also suggests that the company and Chief Executive John Mackey went to great lengths to keep those negotiations secret, including forgoing a sales process to avoid publicity.
"Amazon.com was very sensitive with respect to confidentiality," the 173-page proxy states.
Amazon declined to comment.
Companies started reaching out to Whole Foods in mid-April, about a week after activist investor Jana Partners LLC took an almost 9% stake in the Austin, Texas-based grocer. Jana said at the time that it wanted Whole Foods to more quickly adopt standard grocery-industry practices such as loyalty programs and centralized purchasing to combat a record 18-month stretch of declining same-store sales.
Another grocer, referred to as "Company X" in the filing, wrote to Whole Foods that month expressing interest in possible investment opportunities, and later proposed a merger of equals that would value Whole Foods at between $35 and $40 a share.
Albertsons executives at the time were aware that Amazon was also interested in acquiring Whole Foods but couldn't match the internet giant's offer, said the person familiar with the deliberations.
"Albertsons couldn't get there from a price perspective," the person said.
Whole Foods executives didn't pursue the offers from the private-equity firms because of concerns that they would come in too low and could generate leaks.
Amazon originally offered $41 a share for Whole Foods in May, Friday's filing showed. The grocer responded with a proposal to be acquired for $45 a share. Two days later, on June 1, Amazon raised its bid to $42 and said it would end its acquisition approach if the offer wasn't accepted.
Amazon was also considering other bidding opportunities beyond acquiring Whole Foods, the internet company's representatives said.
Whole Foods accepted that price, which valued the company at a total of about $13.7 billion. The deal was announced on June 16.
--Amrith Ramkumar contributed to this article.
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(END) Dow Jones Newswires
July 07, 2017 15:22 ET (19:22 GMT)