Wal-Mart Not Considering Whole Foods Offer
Wal-Mart Stores Inc. is not actively considering making an offer for Whole Foods Market Inc, according to report from Reuters on Friday. Whole Foods, which accepted a $13.7 billion offer from Amazon.com earlier this month, hasn't received any rival bids as of Friday. Last week, Wall Street analysts expected a rival offer for Whole Foods to surface, and many industry and merger experts agreed. "We wouldn’t be surprised if there’s a bidding war" for Whole Foods, analyst Karen Short of Barclays Capital Inc. said in a note to clients Friday. Wal-Mart had been identified as a potential bidder for Whole Foods by retail analysts last week. Kroger Co., Target Corp. and Costco Wholesale Corp. have also been identified by analysts as potential bidders for Whole Foods.
Total Retail’s Take: For now, it looks like Amazon is in the clear for its proposed purchase of Whole Foods, which, as has been widely reported, figures to bring widespread disruption to the $700 billion U.S. grocery sector. With Wal-Mart dropping out, choosing instead to focus on acquiring digital-native brands such as Jet.com, ModCloth, and Bonobos, it will be interesting to see if a traditional grocer such as Kroger steps up with a bid for Whole Foods, perhaps as a defensive move to keep Amazon out of the vertical — or at least holding it off for a little longer.