Whole Foods Market and Wild Oats Markets Announce Merger to Create Stronger Natural and Organic Foods Retailer Better Positioned
21 Februar 2007 - 10:03PM
PR Newswire (US)
AUSTIN, Texas, Feb. 21 /PRNewswire-FirstCall/ -- Whole Foods
Market, Inc. (NASDAQ:WFMI) and Wild Oats Markets (NASDAQ:OATS) have
today announced they have signed a definitive merger agreement
under which Whole Foods Market will acquire Wild Oats Markets'
outstanding common stock in a cash tender offer of $18.50 per
share, or approximately $565 million based on fully diluted shares.
Whole Foods Market will also assume Wild Oats Markets' existing net
debt totaling approximately $106 million as reported on September
30, 2006. Transaction Highlights: * Whole Foods Market offers
$18.50 per share in cash, a 23% premium to the one-month average
closing price * Transaction enterprise value, including debt, is
expected to be approximately $700 million * Transaction to be
funded at closing with $700 million of senior term loans; in
conjunction with the transaction, Whole Foods Market also intends
to upsize its long-term senior revolving credit facility to $250
million * All of Whole Foods Market's 11 operating regions will
gain stores, with three of its smallest regions gaining critical
mass, and Whole Foods Market will gain immediate entry into a
significant number of new markets * Whole Foods Market expects to
recognize significant synergies through G&A cost reductions,
greater purchasing power, increased utilization of support
facilities and new team member talent. With annual sales of
approximately $1.2 billion, Wild Oats Markets is one of the leading
natural and organic foods retailers in North America. Wild Oats was
founded in Boulder, Colorado in 1987 and listed on the NASDAQ
National Market in 1996. The Company currently operates 110 stores
in 24 states and British Columbia, Canada under four banners: Wild
Oats Marketplace (nationwide), Henry's Farmers Market (Southern
California), Sun Harvest (Texas), and Capers Community Market
(British Columbia). "Wild Oats Markets and Whole Foods Market have
both had a large and positive impact on the natural and organic
foods movement throughout the United States, helping lead the
industry to nationwide acceptance and to becoming one of the
fastest growing segments in food retailing today," said John
Mackey, chairman, chief executive officer, and co-founder of Whole
Foods Market. "Our companies have similar missions and core values,
and we 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." "The growth opportunity in this category has led to
increased competition from many players, most of whom are not
dedicated natural and organic foods supermarkets, but are
considerably larger than we are," said Mr. Mackey. "We have made 18
retail acquisitions in our history, many of which were platform
acquisitions from which we have been able to accelerate our growth
geographically. Wild Oats Markets will be our largest acquisition
and is a great geographical fit as all of our 11 operating regions
will gain stores and three of our smallest regions -- our Pacific
Northwest, Rocky Mountain and Florida regions -- will gain critical
mass. We will also gain immediate access into a significant number
of new markets." "We consider the integration of acquisitions to be
a core competency and have found it generally takes up to two years
to transition to our decentralized operations and implement our
incentive programs. We expect this acquisition to be similar and
that over time we will recognize significant synergies through
G&A cost reductions, greater purchasing power and increased
utilization of facilities. We are particularly excited to gain many
talented team members who will provide valuable support in reaching
our growth goal of $12 billion in sales in 2010. Our company
continues to evolve at a rapid pace," Mr. Mackey continued. "We
have always benefited through learning from past acquisitions and
believe this merger will result in a company that is much stronger
and better-positioned for the future." "As the natural and organic
foods industry continues to receive attention from larger
conventional players, the timing for our two companies to join
forces could not be better," said Gregory Mays, Chairman and CEO of
Wild Oats Markets. "We believe this strategy is in the best
interest of our stakeholders, and our board of directors has
unanimously recommended that Wild Oats Markets' stockholders tender
their shares in this offer." Whole Foods Market will be evaluating
each banner as well as each store to see how it fits into its
overall brand and real estate strategy. Wild Oats Markets has been
rationalizing its store base over the last several years to shed
underperforming stores, but some additional store closures are
expected as well as the relocation of some stores that overlap with
stores Whole Foods Market currently has in development. Whole Foods
Market expects to make significant investments in remodeling stores
before eventually re-branding them as Whole Foods Market stores.
Whole Foods Market has agreed in the merger agreement to commence a
tender offer on February 27, 2007 for all of Wild Oats Markets'
outstanding common stock. The tender offer is conditioned upon at
least a majority of the outstanding Wild Oats Markets' shares being
tendered, as well as customary regulatory and other closing
conditions. Wild Oats Markets' board of directors has unanimously
recommended that Wild Oats Markets' stockholders tender their
shares in the offer. The Yucaipa Companies, Wild Oats Markets'
largest shareholder with approximately 18% ownership, has committed
to tendering its shares. Approval of the transaction by Whole Foods
Market shareholders is not required. The tender offer will expire
within 30 days, subject to extension and to the receipt of
customary regulatory approvals. Whole Foods Market currently
expects to close the transaction in April. RBC Capital Markets is
acting as financial advisor to Whole Foods Market in connection
with the acquisition and has rendered a fairness opinion to its
board of directors. RBC Capital Markets is also serving as dealer
manager for the proposed tender offer. RBC Capital Markets and
JPMorgan will co-lead the debt financing, and JPMorgan, as
administrative agent for the senior credit facility, will assist
Whole Foods Market in seeking an amendment to upsize the credit
facility. Citigroup Corporate and Investment Banking is acting as
financial advisor to Wild Oats Markets. In a separate release
today, Whole Foods Market announced its first quarter financial
results. The Company will host a conference call today to discuss
these announcements at 4:00 p.m. CT. The dial in number is
1-800-896- 8445 and the conference ID is "Whole Foods." A
simultaneous audio webcast will be available at
http://www.wholefoodsmarket.com/ . For further information, please
contact: Whole Foods Market Investor Contact - Cindy McCann,
512.542.0204 Media Contact - Kate Lowery, 512.542.0390 Wild Oats
Markets Investor and Media Contact - Krista Coleman, 303.396.6979
Media Contact - Paul Raab, 303.815.5115 About Whole Foods Market:
Founded in 1980 in Austin, Texas, Whole Foods Market(R) is a
Fortune 500 company and the largest natural and organic foods
retailer. The Company had sales of $5.6 billion in fiscal year 2006
and currently has 191 stores in the United States, Canada and the
United Kingdom. About Wild Oats Markets: Wild Oats Markets, Inc. is
a nationwide chain of natural and organic foods markets in the U.S.
and Canada. With approximately $1.2 billion in annual sales, the
Company currently operates 110 natural foods stores in 24 states
and British Columbia, Canada. The Company's markets include: Wild
Oats Marketplace, Henry's Farmers Market, Sun Harvest and Capers
Community Markets. Legal statements The tender offer described
herein has not commenced. The description contained herein is
neither an offer to purchase nor a solicitation of an offer to sell
shares of Wild Oats Markets. At the time the tender offer is
commenced, Whole Foods Market, Inc. and one of its subsidiaries
intend to file a Tender Offer Statement on Schedule TO containing
an offer to purchase, forms of letters of transmittal and other
documents relating to the tender offer, and Wild Oats Markets
intends to file a Solicitation/Recommendation Statement on Schedule
14D-9 with respect to the tender offer. These documents will
contain important information about the tender offer that should be
read carefully before any decision is made with respect to the
tender offer. These materials will be made available to the
shareholders of Wild Oats Markets at no expense to them. In
addition, such materials (and all other documents filed with the
SEC) will be available at no charge at http://www.wildoats.com/ ,
http://wholefoodsmarket.com/ and on the SEC's website at
http://www.sec.gov/ . This communication is being made in respect
of the proposed merger transaction involving Wild Oats Markets,
Inc. and Whole Foods Market, Inc. In connection with the proposed
transaction, Wild Oats Markets will be filing a proxy statement and
relevant documents concerning the transaction with the SEC.
Stockholders of Wild Oats Markets are encouraged to read the proxy
statement and any other relevant documents filed with the SEC when
they become available because they will contain important
information. These materials will be made available to the
shareholders of Wild Oats Markets at no expense to them. In
addition, such materials (and all other documents filed with the
SEC) will be available at no charge at http://www.wildoats.com/ ,
http://wholefoodsmarket.com/ and on the SEC's website at
http://www.sec.gov/ . Forward-looking statement The following
constitutes a "Safe Harbor" statement under the Private Securities
Litigation Reform Act of 1995. Except for the historical
information contained herein, the matters discussed in this press
release are forward-looking statements that involve risks and
uncertainties, which could cause our actual results to differ
materially from those described in the forward looking statements.
These risks include but are not limited to general business
conditions, the timely development and opening of new stores, the
impact of competition, and other risks detailed from time to time
in the SEC reports of Whole Foods Market and Wild Oats Markets,
including Whole Foods Market's report on Form 10-K for the fiscal
year ended September 24, 2006 and Target's report on Form 10-K for
the year ended December 31, 2005. Neither Whole Foods Market nor
Wild Oats Markets undertakes any obligation to update
forward-looking statements. In addition to those risks, there are
risks and uncertainties associated with the tender offer made by
Whole Foods Market, Inc. for Wild Oats Markets' common stock. Those
risks include risks that the transaction will not be consummated on
the terms or timeline first announced. Further information
concerning those risks will be included in Whole Foods Market's
filings with the Securities and Exchange Commission in response to
the tender offer. DATASOURCE: Whole Foods Market, Inc.; Wild Oats
Markets, Inc. CONTACT: investors, Cindy McCann, +1-512-542-0204, or
media, Kate Lowery, +1-512-542-0390, both of Whole Foods Market,
Inc.; or investor and media, Krista Coleman, +1-303-396-6979, or
media, Paul Raab, +1-303-815-5115, both of Wild Oats Markets, Inc.
Web site: http://www.wholefoodsmarket.com/ http://www.wildoats.com/
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