Whole Foods and Wild Oats Combination on Hold Again

Monday, 20 Aug 2007 | 3:51 PM ET

Whole Foods Market's

Shoppers head into a Wild Oats Market in Boulder, Colorado.
David Zalubowski
Shoppers head into a Wild Oats Market in Boulder, Colorado.

plan to buy Wild Oats Markets is on hold again after an appeals court demanded more time Monday to consider a request by U.S. antitrust regulators to stop the deal.

Whole Foods had planned to move ahead with the deal, announced six months ago, as early as noon Monday if there was no stay granted.

The U.S. Court of Appeals for the District of Columbia gave Whole Foods and Wild Oats until 4 pm on Wednesday to file a supplemental response to address errors the FTC alleges were committed by the district court.

The order "should not be construed in any way as a ruling on the merits," a panel of three circuit judges wrote in the order.

The judges said the response from the companies must specifically address "each of the eight reversible errors" the FTC alleges were committed by the district court.

If the FTC has a reply, it must submit it by noon Thursday.

The FTC had no immediate comment on the stay, a spokesman said. Whole Foods and Wild Oats could not be immediately reached for a comment.

The $565 million deal has been on hold since the FTC sued to block it in June, saying it would hobble competition in the market for natural and organic groceries.

Judge Paul Friedman of the U.S. District Court for the District of Columbia refused to grant a stay on Friday, a day after he rejected the FTC's request for a preliminary injunction against the deal.

Whole Foods has insisted the FTC looked at the deal in the wrong way by focusing on natural and organic grocers rather than looking at the overall industry. When Whole Foods announced its plan to buy Wild Oats for $18.50 per share on Feb. 21, it said it was facing increased pressure from larger players.

Whole Foods and Wild Oats are the two largest grocers focused on the organic and natural sector, but they pale in comparison to larger traditional grocers such as Kroger, which have been selling more organic fare and prepared foods, the cornerstones of Whole Foods' strategy.


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