Whole Foods to merge with Wild Oats

Whole Foods Market Inc and Wild Oats Markets have signed a definitive merger agreement under which Whole Foods will acquire Wild Oats’ outstanding common stock in a cash tender offer of $18.50 per share, or about $565 million. Whole Foods will also assume Wild Oats’ net debt totaling around $106 million.

With annual sales of about $1.2 billion, Wild Oats is a natural and organic food retailer. Founded in Boulder CO in 1987, the company operates 110 stores in 24 states and British Columbia under four banners: Wild Oats Marketplace, Henry’s Farmers Market, Sun Harvest, and Capers Community Market.

Austin TX-based Whole Foods will evaluate each banner and each store to see how it fits into its overall strategy. Some store closures and relocations are expected.

Whole Foods has agreed to commence a tender offer Feb 27, 2007, for all of Wild Oats’ outstanding common stock. The offer will expire within 30 days, subject to extension and the receipt of customary regulatory approvals. Whole Foods expects to close the transaction in April.