Tuesday, August 23, 2011

Is Whole Foods a takeover target?

There are often rumors about Whole Foods taking over retail space. Now there is chatter about someone else taking over Whole Foods.

In a recent LiveTradingNews.com story, Paul A. Ebeling, Jr. mentioned that the U.K.'s Daily Mail singled out Kohlberg Kravitz Roberts & Co. and Bain Capital as private equity firms that may have an interest. The two firms have been mum on the subject, though.

Ebeling points to Whole Foods' high profit margins (relative to traditional grocery stores) and high-priced stock as reasons that the company would probably be an expensive play, even to private equity firms that don't have problems raising lots of cash. However, he argues that interest may still be strong, as the company would most likely be valued as a retailer of luxury goods and healthy lifestyles, not merely as a grocery store. And Ebeling thinks Whole Foods' value will continue to increase.

He concludes that Whole Foods "is a leveraged buyout in theory at this time." He adds that we should stay tuned, which of course we will.


No comments:

Post a Comment