Whole Foods Market has attracted more private equity investment after US fund Yucaipa Cos. disclosed that it has bought a stake in the US organics retailer.
The investment, revealed in a filing with the US Securities and Exchange Commission today (8 January), follows last November’s move from Green Equity Investors to buy a 17% stake in Whole Foods.
Yucaipa, headed by renowned investor Ron Burkle, has amassed a 7% stake in Whole Foods, which it acquired in transactions between 24 November and 7 January for $8.94 to $10.55 per share.
In the filing, it was disclosed that Yucaipa believed the shares were “undervalued by the market at the time they were acquired”.
The filing also said Yucaipa believed there are “substantial opportunities” for Whole Foods to “improve operations and its pricing image while maintaining its high-quality product offering”.
Yucaipa said it intended to “communicate with, and express their views to, the board of directors and management” of Whole Foods, as well as other shareholders and potential investors.
The investment fund also said it may look to solicit or vote its shares to approve an “extraordinary transaction”, including a merger, as well as the possibility of looking to change the Whole Foods board.
Last month, two executives from Leonard Green & Partners, an affiliate of Green Equity Investors, joined the Whole Foods board.
The economic downturn has hit Whole Foods, which sells a range of natural and organic products, in recent months.
For the year to 30 September, Whole Foods posted net income of $114.5m, down from $182.7m a year earlier. Sales stood at $7.93bn, up from $6.59bn a year earlier.