Amazon CEO Jeff Bezos: How Should I Spend My Money?

Amazon CEO Jeff Bezos: How Should I Spend My Money?

Amazon CEO Jeff Bezos: How Should I Spend My Money?

If the $13.7 billion deal for Whole Foods goes through, Amazon gets the advantage of using the stores as mini-distribution hubs to deliver items to customers.

Whole Foods will eventually be part of Amazon CEO Jeff Bezos's empire.

The announcement of the deal has buoyed shares of both firms, with Whole Foods shares spiking to more than $43.50 - $1.50 more than Amazon's $42-a-share offer.

Amazon's planned acquisition of Whole Foods is expected to make the low-margin supermarket industry even more competitive.

In anticipation of a looming bidding war, Short revised her target price for Whole Foods's shares from $38 to $48. "As a result, the potential universe of bidders could include Kroger, Target and Wal Mart to name a few". And in fact, it is not uncommon to see shares of a company to be acquired trade at a discount to the offered price when there is uncertainty about whether regulators will approve the deal, as some have suggested there is in this case.

Oppenheimer analyst Rupesh Parikh agreed.

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He wrote in a report that "another bid cannot be ruled out" because other big retailers may want to do anything they can to prevent Amazon from getting even more powerful.

"It appears there is some money being left on the table", he wrote.

But with Whole Foods trading at a roughly 3 percent premium to the offer price, it seems clear that some see the potential for another bidder to step in.

Any buyer of Whole Foods would likely argue that it was not in the same market, said Alden Abbott, an antitrust expert with the Heritage Foundation. Jana Partners announced in April that it took one.

After all, it was Whole Foods' CEO who referred to Jana in a Texas Monthly interview earlier this month as "greedy bastards".

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