Amazon cornered Whole Foods into not seeking more bids, filing shows

WASHINGTON: Amazon.com Inc told Whole Foods Market Inc it would not engage in a sale process for the U.S. grocer that involved other bidders, a regulatory filing showed on Friday, shedding new light on the $13.7 billion acquisition.

The previously undisclosed details on the negotiations show how Amazon used its deep pockets and brand as leverage to convince Whole Foods to accept a sale process that would not result in a bidding war.

Whole Food shares traded above Amazon's $42-per-share deal price for the first few days after the agreement was announced on June 16, on investor expectations of a higher bid. They have since traded slightly below that price, as such hopes dampened.

The regulatory filing shows that Whole Foods agreed to forgo an auction process after it received expressions of interest from two other companies and four private equity firms.

None of these parties are identified by name. The filing refers to a 'company X,' which proposed a merger of equals that valued Whole Foods at between $35 and $40 per share. U.S. supermarket chain owner Albertsons LLC is company X, a source familiar with the matter said. Albertsons did not respond to a request for comment. Nevertheless, Austin, Texas-based Whole Foods agreed not to pursue this, or solicit any other bids, in part because Amazon was "very sensitive with respect to confidentiality" and did not want to compete in a broader sale process, the filing said.