Deals and IPOs

Jana Partners stands to make hundreds of millions from Whole Foods acquisition

Key Points
  • Activist investor Jana Partners has a 9 percent stake in Whole Foods.
  • Amazon announced plans on Friday to acquire Whole Foods, valuing the deal at $13.7 billion.
Jana's effect on Whole Foods
Jana's effect on Whole Foods

Activist investor Jana Partners stands to make hundreds of millions of dollars from Amazon's proposed acquisition of Whole Foods Markets.

Jana Partners in April took a nearly 9 percent stake in the Texas-based grocery chain. The announcement bumped shares of Whole Foods stock up 10 percent as Jana Partners suggested the struggling grocer should consider putting itself up for sale.

Whole Foods stock spiked more than 27 percent to about $42 a share Friday morning after Amazon announced its plans to acquire the grocer in a deal valued at $13.7 billion. Amazon's stock was up more than 3 percent.

Barry Rosenstein, managing partner and co-portfolio manager of JANA Partners LLC.
Adam Jeffery | CNBC

Whole Foods closed nine stores in the first quarter of 2017 and abandoned a goal to open 1,200 stores. Whole Foods' relationship with Jana Partners has been strained by the investor's aggressive strategies, leading the CEO of Whole Foods, John Mackey, to call them "greedy bastards" in an interview with TexasMonthly in June.

Jana has taken a similar tack in other investments it saw as underperforming. In 2013, the investor gained a 6 percent stake in Safeway, and then encouraged the grocer to exit certain markets and sell off non-core assets. In 2015, Jana acquired 7.2 percent of food packager ConAgra's shares and pushed them to divest weak assets after criticizing "persistent underperformance."

— CNBC's Sarah Whitten and Jeff Daniels contributed to this report.