Will Walmart Bid for Whole Foods?

By Douglas A. McIntyre Updated Jan 12, 10:48AM EST · Published Jun 22, 10:20AM EDT

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Will Walmart Bid for Whole Foods? — © Thinkstock

The Amazon.com Inc. (NASDAQ: AMZN) buyout of Whole Foods Market Inc. (NASDAQ: WFM) was partially to flank Wal-Mart Stores Inc. (NYSE: WMT), which counts on groceries for a large portion of its U.S. revenue. Speculation has arisen that Walmart will try to turn the tables and make a higher bid for the upscale food retailer.

A JPMorgan research report that said:

We do think there is a chance that Walmart makes a bid. WMT stands out as the only company in our coverage with the means and motive to counterbid, but the motive is ultimately more driven by a defensive strategy.

Walmart has over 4,000 locations in the United States, and Whole Foods only 420. A bid for Whole Foods would be a defensive move by America’s largest retailer more than anything else.

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Walmart could face an antitrust charge if it were to make an offer, although the charge would be a stretch. Several large grocery retailers, led by Kroger Co. (NYSE: KR), have a large part of the market.

Walmart would need to top Amazon’s $13 billion offer, which is about $43 a share. The speculation from JPMorgan has not been taken seriously by the market so far. Whole Foods stock was basically flat over the past few days, and last seen at $43.01 on Friday. It has a 52-week trading range of $27.67 to $43.64 and a consensus price target of $38.00.

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About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.