FINANCE

Whole Foods’ Wild Oats Takeover Still in Question

BY CSA STAFF

Austin, Texas In an unexpected and unusual move, the U.S. government is once again challenging Whole Foods Market’s purchase of rival Wild Oats.

Even though the deal closed early last year—and Whole Foods has since sold 35 Wild Oats stores and closed 12—the Federal Trade Commission (FTC) is trying again to stop Austin, Texas-based Whole Foods’ takeover of Wild Oats.

The U.S. government announced it will ask an appeals court Wednesday to stop the takeover.

The FTC tried to block Whole Foods’ acquisition of Boulder, Colo.-based Wild Oats after the transaction was announced last February, arguing that it would stifle competition and harm consumers. But a federal judge rejected the request, and Whole Foods and Wild Oats closed the deal in August 2007.

Instead of following the typical path and discontinuing the fight, the FTC isn’t letting go, arguing that the companies haven’t finished combining their operations and Whole Foods hasn’t closed all the Wild Oats stores it plans to close. The FTC said it still has time to order the combined company to sell stores or other assets to protect competition.

The FTC would have to begin additional legal proceedings to take such a step.

The government agency asked the same appeals court last August to delay the closing of Whole Foods’ acquisition pending the outcome of its appeal, but the court refused. Antitrust experts have said that makes it less likely the court will rule in the agency’s favor now.

The FTC said in court papers that the district court applied an improper legal standard when it denied the agency’s request to bar the acquisition.

The FTC and lawyers representing Whole Foods are arguing the case before a three-judge panel at the U.S. Court of Appeals for the D.C. Circuit Wednesday at 9:30 a.m. EDT.

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BJ’s touts low-cost healthy offerings

BY CSA STAFF

NATICK, Mass. BJ’s Wholesale Club is promoting itself as the smart solution for price-and-health-conscious consumers. The company is touting its savings on organic and natural food selections such as a six pack of Stonyfield Farms 10 oz. Organic Smoothies which costs $6.99 at BJ’s, versus $10.14 at the supermarket.

“We believe our organic foods and natural meat and poultry provide the exceptional quality our members have come to expect at a price they can afford,” said Laura Sen, president and coo of BJ’s Wholesale Club. “These two categories are growing exponentially and are on a pace that is outgrowing other product categories.”

Sen reiterated the organic and natural food selection at BJ’s is undergoing continuous expansion. “With the popularity of items like 100-calorie packs and flavored waters, consumers continue to show that products related to health and fitness are extremely important to them,” said Sen. “We take pride in being able to provide our members with additional organic and natural food selections on a regular basis.”

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Report: Blockbuster weighing options for Circuit City

BY CSA STAFF

NEW YORK Blockbuster is studying various options to fund its buyout offer of Circuit City, such as using Circuit City’s own balance sheet, even as the electronics retailer is asking Blockbuster to prove it can handle an all-cash bid, the Wall Street Journal reported on April 21.

Blockbuster is also considering using its existing debt facility, possible asset sales and cost savings for the deal, the report said.

Last week, Blockbuster offered up to $1.3 billion to buy Circuit City but the offer has drawn doubts from Wall Street, investors and Circuit City itself over how Blockbuster will fund the bid.

While investors fear that Blockbuster may need to raise new debt or renegotiate its current debt to finance the offer, Blockbuster is hopeful that it has alternative funds to sidestep that possibility, the report said.

Still, Blockbuster will not go ahead with the offer if it does not like what it sees in Circuit City’s financial books, the report said in a separate report, citing an interview with Blockbuster ceo Jim Keyes.

Circuit City has not allowed Blockbuster to see its books.

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