Whole Foods targeted for takeover
Albertsons chain exploring purchase, has yet to make an offer
AUSTIN, Texas — Supermarket chain Albertsons is exploring a possible takeover of Whole Foods Market, the Financial Times reported Monday, citing unnamed sources.
Albertsons, which operates about 2,200 stores, is controlled by buyout group Cerberus Capital Management. Cerberus has had preliminary talks with bankers about making a bid for Whole Foods, the Financial Times reported, citing a person close to the buyout firm. No formal bid has yet been made, according to two people briefed on the situation, the Financial Times reported.
Shares of Austin-based Whole Foods jumped more than 4 percent in afternoon trading following the Financial Times report. The share price ended the day up 75 cents, or 2.1 percent, at $36.46.
A Whole Foods spokeswoman on Monday told the Austin American-Statesman the company had no comment on the report.
The reported interest from Boise, Idaho-based Albertsons comes about two weeks after investment group Jana Partners revealed it had built a 9 percent stake in Whole Foods and raised the possibility of either a management shakeup or even a sale for the company. Whole Foods has a current market value of about $11 billion.
A number of factors, including intensified competition, have hit Whole Foods hard, leading to struggles in recent quarters. A March report from a Barclays analyst, for instance, suggested Whole Foods had lost 14 million customers since 2015 — many of them to Kroger, which has stepped up its organic offerings.
Kroger has also been rumored to be interested in Whole Foods, according to published reports. So has Florida-based supermarket chain Publix.
Founded in Austin in 1978, Whole Foods has 462 stores worldwide and 87,000 employees. In its fiscal first quarter, Whole Foods recorded record sales of $4.9 billion, but saw its net income decline.