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Amazon Threatened To Kill Its Whole Foods Deal if the Grocer Started a Bidding War (recode.net)

Posted by msmash on from the my-way-or-highway dept.

An anonymous reader shares a report: Amazon has long had a reputation as a hard-ball negotiator. It turns out its negotiations with Whole Foods leading up to its $13.7 billion acquisition agreement were no different, according to an SEC filing outlining a timeline of the talks between the two companies. On May 23, Amazon made a written offer to acquire Whole Foods for $41 a share, less than a month after the first meeting between senior executives of the companies, the filing said. Whole Foods came back with a counterproposal of $45 a share, which got Amazon to increase its offer to $42. But Amazon's bankers from Goldman Sachs then "stressed several times" that the increase to $42 represented Amazon's "best and final offer." Amazon's bankers "also made it clear again ... that Amazon.com would disengage from its efforts to acquire the company and pursue other alternatives and initiatives if the $42.00 per share price were not accepted," the filing said, "and that Amazon.com expected that the company would not approach other potential bidders while the company was negotiating with Amazon.com." Amazon also threatened it would walk away if the talks leaked to the press, which they did not. Translation: $42 or nada.

3 of 173 comments (clear)

  1. Hard ball negotiator - he he he by xxxJonBoyxxx · · Score: 1, Informative

    The stock was trading on the open market around $35/share and Amazon spent 20% over retail ($42/share). Seems like Whole Foods "won" the negotiations to me.

    1. Re:Hard ball negotiator - he he he by Anonymous Coward · · Score: 2, Informative

      Just because some shares trade for $35 doesn't mean all shares do.

      Once all the shares offered at $35 are bought up the price goes up. Once all the shares at $36 etc. At some point counter parties might notice and begin front running orders. Some parties holding shares may decide not to sell. A board approved $42 price means everyone's shares get converted to a pile of cash.

  2. Re:Why is this by Anonymous Coward · · Score: 2, Informative

    Are you one of those nuts who thinks free speech means no one can ever stop anyone from speaking? The US constitution bars CONGRESS from making any law abridging free speech. Amazon is free to enter into a negotiation with Whole Foods, and make a stipulation that the deal will be called off if at any point Whole Foods speaks of the deal publicly. Not a single constitutional issue with regards to free speech.