Over the following weeks, Whole Foods’ management continued to weigh its options. One competing grocery retailer suggested a “merger of equals,” while another competitor proposed a commercial agreement, such as a supply-chain arrangement.
Then, on May 23, Amazon sent a written offer to buy Whole Foods for $41 per share, valuing the company at $13.1 billion — well above the $35 it was trading at. The tech giant communicated that it felt its bid was very competitive, and it demanded secrecy during the transactions. Any leak or rumor of a deal, and Amazon would be willing to terminate discussions.
Amazon was aggressive about the last point: protecting the secrecy of the “highly sensitive” negotiation. Goldman Sachs, representing Amazon in the transaction, separately called up Whole Foods’ banker at Evercore two days later to reiterate: Confidentiality was crucial to a deal, and they would have no part in a multiparty bidding war.
Whole Foods’ board met to discuss its options on May 30. It now had six suitors in addition to Amazon: two industry competitors and four private-equity firms.
Evercore advised the board that the buyout shops were unlikely to be able to top Amazon’s price. And according to the SEC filing, the bank reminded the directors “that Amazon.com had re-emphasized in multiple communications that Amazon.com would not be willing to further engage with the Company in the event of a rumor or leak of a potential transaction.”
Whole Foods decided to pursue Amazon, but it wanted to sweeten the deal. It made a counteroffer of $45 per share, or nearly $14.4 billion. Amazon wasn’t pleased.
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