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August 24, 2007

US: FTC denied stay for appeal in Whole Foods case

Natural foods retailer Whole Foods Market looks set to be able to complete its US$565m acquisition of rival chain Wild Oats Markets after a US appeals court denied the Federal Trade Commission's (FTC) request for a stay pending appeal.

Natural foods retailer Whole Foods Market looks set to be able to complete its US$565m acquisition of rival chain Wild Oats Markets after the US Court of Appeals for the District of Columbia denied the Federal Trade Commission’s (FTC) request for a stay pending appeal.


The appeals court yesterday (23 Aug) denied the FTC’s request for a stay to preclude the closing of the merger pending appeal and dissolved an administrative injunction of 20 August, 2007, which had prevented the transaction from going forward while the court considered the FTC’s motion.


“We are pleased to have cleared what we expect to be our last legal hurdle,” said Whole Foods chairman and CEO John Mackey. “We look forward to closing this merger and believe the synergies gained from this combination will create long-term value for our customers, vendors and shareholders as well as exciting opportunities for our new and existing team members.”


It is now widely expected that the FTC will abandon its attempt to block the deal. Whole Foods’ tender offer to purchase outstanding shares of common stock of Wild Oats expires on 27 August at 5:00pm ET.


Whole Foods launched its takeover bid for Wild Oats in February, but the FTC moved to block the deal on antitrust grounds in June. The FTC argued that the takeover would stifle competition and lead to higher prices for consumers, but Whole Foods contends that the merged company would not erode competition, pointing to the increasing expansion of mainstream retailers like Wal-Mart and Kroger Co. into the natural and organic sectors.

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