Judge Gives Whole Foods Nod to Buy Wild Oats; Deal Could Close Monday

WASHINGTON -- Whole Foods Markets overcame a major hurdle yesterday, as a federal judge denied the Federal Trade Commission's request for a preliminary injunction to temporarily block the chain's $565 million purchase of rival Wild Oats Markets, Inc.

U.S. District Judge Paul L. Friedman here effectively cleared the way for the merger to proceed, declaring that the plan doesn't violate antitrust laws. His reasons for denying the FTC request was filed in a 93-page document that was sealed because it contains what are considered to be corporate secrets.

The FTC could appeal the ruling to a higher court, and is likely to seek a stay pending appeal. Whole Foods Market and Wild Oats Markets said they have agreed with the FTC to not close the merger prior to noon, Eastern time, on Monday, August 20. Absent a stay pending appeal, the companies said they could close the transaction at any point after noon on Monday.

The agency had cited antitrust concerns about the proposed union, while Whole Foods has maintained that it is now part of the supermarket industry at large, and thus its merger with Wild Oats poses no special threats to competition.

Whole Foods in February said it wanted to buy Wild Oats for $18.50 per share. The FTC filed a lawsuit to block the merger on June 6. Whole Foods and Wild Oats consented to a temporary restraining order pending a hearing on the preliminary injunction, which concluded on Aug. 1.

In related news, Whole Foods said late on Wednesday that it had extended the expiration date for its tender offer to purchase outstanding shares of Wild Oats once again to 5 p.m. ET on Monday, Aug. 20.

As of the close of business on Aug. 15, a total of 20,769,895 shares of Wild Oats common stock, representing approximately 69.4 percent of the shares that were outstanding as of July 27, have been tendered and not withdrawn pursuant to the tender offer, Whole Foods said.
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