The Whole Foods in Seattle South Lake Union neighborhood, just steps away from Amazon’s downtown Seattle headquarters. (GeekWire photo / Brian Westbrook)
Shares of Whole Foods closed Friday at $42.68 — topping the $42 per share offer that Amazon put in for the Austin, Texas-based grocery store chain.
Why would Wall Street push shares of Whole Foods higher than the offer price on the table?
Some speculated that the stock rose above $42 in anticipation that another buyer could emerge to challenge Amazon, potentially kicking off a bidding war for the 37-year-old grocery chain. The total value of Amazon’s offer stood at $13.7 billion, marking the largest acquisition offer in Amazon’s history.
Barclay’s analyst Karen Short today noted that another offer could be placed on the table for Whole Foods, prompting her to raise her stock price target for Whole Foods to $48 per share.
According to MarketWatch, Short said that competitors will work hard to “prevent the asset from landing in Amazon’s lap.”
That raises the question: Who could outbid Amazon?
Walmart naturally comes to mind, and there’s certainly no love lost between the two retail titans. Kroger, the Ohio-based grocery chain, also could make a run at Whole Foods, though its stock was torched today, dropping nine percent after the Amazon-Whole Foods deal was announced. Kroger’s market value also stands at just $16.5 billion, so less than what Amazon is offering for Whole Foods. Some also speculated that a European grocery conglomerate could come knocking on Whole Foods’ door, though Amazon’s growing power would make it a formidable competitor to take on.
If Whole Foods took another offer, it would have to pay a $400 million break-up fee to Amazon, according to CNBC.
Amazon’s stock closed Friday at $987.71, up 2.44 percent. It’s market value now stands at $466 billion, making it one of the most powerful companies in the world.
Shares of Whole Foods rose 29 percent today after Amazon announced its takeover.
Here’s a look at shares of Amazon and Whole Foods over the past year.