Wild Oats Markets Inc. - Articles - Zimbio

Whole Foods Market & Wild Oats Marriage Not Made In Organic Heaven

Tue, 30 Jul 2008 05:20:00 GMT

posted by zafarinfas

The merger that has taken place for much of the last year between Whole Foods Market and Wild Oats has taken an interesting turn today. The U.S. Court of Appeals in Washington D.C. sent the case back to the lower U.S. District Court for District of Columbia in a 2-1 ruling that stated that the judge did not spend enough time considering the FTC's arguments against the merger.

This could get very interesting, as integration of the Wild Oats stores into the Whole Foods Market universe has pretty much happened already. For now, according to Whole Foods Market, business will be as usual, pending the ongoing case.

Here are the links to the complete story:

LA Times
Bloomberg
NY Times
Reuters

A CFA from Zack's Investment Research, Rob Plaza, posted a very good reality-check on this whole situation. Essentially, the FTC is misguided in their attempt to stop the merger, because they're failing to realize that the organic industry goes beyond just Whole Foods and Wild Oats. Whole Foods Market's sales are tiny compared to the combined sales of Wal-Mart, Kroger, SuperValu, and Safeway - supermarket chains that also offer an increasingly large amount of organic products.

Court reverses Whole Foods-Wild Oats ruling

Thu, 1 Aug 2008 00:29:00 GMT

posted by pocodog91
Court reverses Whole Foods-Wild Oats ruling

Tuesday July 29, 3:11 pm ET
By Christopher S. Rugaber, AP Business Writer

Appeals court overturns ruling allowing Whole Foods to buy Wild Oats, but doesn't undo deal

WASHINGTON (AP) -- Whole Foods' long-running effort to acquire its rival organic supermarket chain Wild Oats isn't completely out of the legal woods yet.

A three-judge federal appeals court panel on Tuesday overturned a lower court ruling from last year that allowed Whole Foods Market Inc. to acquire Boulder, Colo.-based Wild Oats Markets Inc.

The 2-1 ruling sends the case back to the lower court for further consideration, but doesn't halt Austin, Texas-based Whole Foods' integration of the Wild Oats chain or require that the deal be undone.

However, if the district court ultimately rules in favor of the Federal Trade Commission, which sought last year to block the deal, it could disrupt Whole Foods' efforts to combine the companies.

Antitrust laws at work...

I honestly don't have any idea what the motivation behind this is, but this is a ridiculous, foolish, unbelievable move. Whole Foods and Wild Oats together is far from a monopoly. Both companies have sizable market share, but the competition is increasing in larger stores as well as in independent local grocery stores. Heck, buying organic food at Wal-Mart isn't too uncommon these days. Honestly I don't know how Whole Foods and Wild Oats could "hobble competition."

What I find especially hilarious is that the FTC continually goes after Whole Foods while meanwhile a massive bailout of Fannie Mae and Freddie Mac is underway. Henry Paulson and Ben Bernanke have all but admitted that Fannie and Freddie are monopolies. And why don't we look at the Federal Reserve while we're at. The Fed controls money, credit, and interest rates and is made up of the world's largest banks. Hmmm... could there be a conflict of interest there when deciding interest rates? Maybe disrupt the markets a bit? This is pick and choose interventionism at its best. For some reason the FTC will not accept that Whole Foods and Wild Oats together are not a monopoly.

Antitrust laws sound like a good idea, but they simply do not work well. The majority of antitrust lawsuits are from companies that see them as an easy, attractive way to tie up and slow down competition. I have a hard time taking the FTC seriously if they won't go after Fannie and Freddie. Basically the government will regulate the markets in the name of fairness, all the while creating socialistic monopolies also in the name of fairness ("Everyone needs to own a house!"). When monopolies created by the government failed, they are bailed out almost without a second thought by people who were not even elected to their positions (Ben Bernanke and Henry Paulson). Socialism, monopolies, and ridiculous regulations are created and expanded in the name of fairness and equality.

So, the FTC is going after a legitimate buyout between Whole Foods and Wild Oats, when it is clear that neither company has the ability to control the organic food market. Even though I am a shareholder of Whole Foods, it is absolutely ridiculous to think that both companies could control certain markets. Consumers can go elsewhere if they feel the companies are pricing items too high. You see, there's this doozy of an idea called capitalism. A market driven by the consumer? Maybe the government ought to look into it.

Monopolies are created through help by the government. Today no company can fail, the Federal Reserve for some reason is getting more power, and in the end the bill will come to the people. These bailouts are only increasing the dependency on Fannie and Freddie and will not come close to solving the problem. Eventually, these idiotic policies will get to the point where they aren't sustainable any longer. I can't say when, but history has shown that socialism, monopolies, and fiat monetary currencies are unsustainable and do not work in the long run. It will come to an end one way or another, hopefully sooner rather than later. Hopefully the district court is smart and understands the situation more than the buffoons at the FTC, allowing the Wild Oats buyout to go on as usual without further interruption.

Courtesy of Pencils2

FTC should not be going after Whole Foods

Mon, 29 Jul 2008 16:38:00 GMT

Be careful what you wish for Mr. Mackey!

Thu, 1 Aug 2008 11:35:25 GMT

posted by HoovEdJeff

There’s an old saying that goes something like this: Be careful what you wish for, lest it come true. Take heed John Mackey!

Let me explain. In a previous post (read here) I mentioned that the Whole Foods Market founder and CEO was quoted as saying that if he could go back in time “we wouldn’t have done the Wild Oats acquisition.” Now a US appeals court ruling reversing the decision that allowed the $565 million purchase to proceed, has put the deal on hold, at least temporarily. The court has remanded the case for reconsideration to US District Judge Paul Friedman, saying that he erred when he dismissed the Federal Trade Commission’s claim that the deal violated antitrust law. The FTC opposes the combination saying it could stifle competition and lead to higher grocery prices.

From the point of view of WFM, the deal is a fait accompli as the company has already closed some Wild Oats stores, sold others, and is well down the road toward integration of the two chains. However the ruling, which states that “only in a rare case would we agree a transaction is truly irreversible,” leaves the door open for redress if the acquisition of Wild Oats is found to be unlawful. Of course, that has yet to be determined. (Read the appeal court’s opinion here.)

But even the prospect of reversal begs the question: How do you undo a (largely) done deal?

Potential consequences include a freeze on any further integration of the two chains, including ordering WFM not to close or rename any more Wild Oats stores. And if the FTC ultimately prevails it could order WFM to divest the Wild Oats stores it acquired to be run independently.

In a statement, WFM said that it was disappointed with the court’s ruling and was considering its legal options. Until then, the continuing integration of the Wild Oats business is in limbo while Whole Foods awaits the District Court’s response.

I wonder what Mackey is wishing now?

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FTC Plans Whole Food-Wild Oats Merger Hearings

Sun, 11 Aug 2008 22:32:00 GMT

posted by organicorbust
" WASHINGTON -(Dow Jones)- The U.S. Federal Trade Commission is moving forward with plans to hold full administrative hearings on the 2007 merger between Whole Foods Markets Inc. (WFMI) and Wild Oats Markets Inc.

The commission's plans, announced in an order released Friday, come two weeks after a federal appeals court revived the FTC's antitrust challenge to the $565 million transaction.

The commission has argued the merger would lessen competition in the market for natural and organic foods.

Whole Foods and Wild Oats consummated their merger last August after a federal judge rejected the FTC's preliminary bid to block the deal.

The commission, however, has continued to press its case, leaving open the possibility that it could try to halt further integration of the two companies or require Whole Foods to sell some operations."

Read the article