Walmart Will Struggle to Top Amazon’s Offer for Whole Foods

Walmart’s market capitalization dropped 5 percent, losing $11 billion, after Amazon unveiled its $13.4 billion deal to buy Whole Foods Market on Friday. Meanwhile, Whole Foods shares closed Friday nearly 2 percent above the agreed price, implying that some investors think a rival bid could emerge. But even for Walmart, that would be a stretch.

Whole Foods’ filing suggests it wasn’t shopped around. Amazon became serious only in late April, when the company’s team signed confidentiality agreements. That means some shareholders, notably Jana Partners, an activist owner of an 8 percent stake, could be receptive to a higher price. A grocery industry buyer like Walmart could also cut costs, helping to justify paying more than the 27 percent premium Amazon is offering.

Then there’s the defensive value. If investors were right to sell off grocery chain stocks across the…

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