FTC Case Against Whole Foods/Wild Oats Merger Looks Strong, Analyst Says

NEW YORK -- The Federal Trade Commission's case against the proposed merger of Austin, Texas-based Whole Foods Market, Inc. and rival Wild Oats Markets, Inc. has become stronger, a Bear Stearns analyst said yesterday.

His comments came after the FTC revealed that Whole Foods c.e.o. John Mackey had posted derogatory comments about Wild Oats on Internet message boards under the screen name "Rahodeb."

After reading through the FTC's case, which the agency posted on its Web site earlier this week, analyst Robert Summers said, "We believe the FTC case against the merger appears solid, and are now leaning more toward the FTC prevailing in its injunction."

The FTC documents show that Whole Foods seemed "obsessed with running Wild Oats out of business" by acquiring and then dismantling the company, according to Summers.

As for Mackey's message-board posts, Summers said, "At minimum, this provides another distraction for the company as it tries to improve investor sentiment that its growth prospects have rebounded. At worst, this endangers the c.e.o. role at [Whole Foods]."
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