Natural foods retailer Whole Foods Market has disclosed the loan arrangements it will use to fund the US$565m takeover of rival Wild Oats Markets.
The US retailer has entered into a five-year $700m senior term loan agreement to fund the transaction, and has signed a new five-year $250m revolving credit agreement, which will replace its existing $200m revolver.
Whole Foods has also assumed existing Wild Oats debt, net of cash, of around $137m.
Having seen the way cleared to complete the acquisition, following the failure of the Federal Trade Commission to block the acquisition on antitrust grounds, Whole Foods said it had received tenders for almost 97% of Wild Oats’ shares by its deadline of 5:00pm ET on Monday (27 Aug).
It is currently in the process of purchasing a further 12.7% of the outstanding shares which were subject to guaranteed delivery within three working days of the deadline, and will then acquire the remaining shares in accordance with the short-form merger procedure available under Delaware law.
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“While closing this merger has taken longer than we anticipated, we are very excited to now begin the integration process,” said WFM’s chairman and CEO John Mackey. “We have found it generally takes up to two years to transition to our decentralised operations and implement our incentive programmes.
“We expect this acquisition to be similar and that over time we will recognise significant synergies through G&A cost reductions, greater purchasing power, increased utilisation of our facilities and new team member talent.”