Amazon Buying Whole Foods
NOT A DONE DEAL AS YET!
Amazon.com, Inc. (NASDAQ:AMZN) announced Friday that it is acquiring Whole Foods Market, Inc. (NASDAQ:WFM), for $42 per share in an all-cash transaction of about $13.7 billion, including Whole Foods' debt – which is a 27% premium to its closing price Thursday. The deal implies a $13.4 billion market cap for the natural and organic grocer. The deal is expected to close in the second half of this year.
Amazon stock closed Friday trading up 2.44%, whilst Whole Foods Market was up 29.10%. This was certainly a great profit maker for those that had call options on WFM.
This is not to say that the deal doesn’t make sense, because it aids Amazon's efforts to break into the grocery business and grows its customer base, as Whole Foods' brand would resonate massively with the Amazon customers as Whole Foods' stores could become a ready-made distribution network, and it could help source Amazon's food delivery business– but simply leads to the following question – is
this surge finished or is there still more to be made on the deal?
Best of Trading,
Director of Stock Options Made Easy