staff and news service reports
updated 7/20/2007 11:53:36 AM ET 2007-07-20T15:53:36

Natural and organic food retailer Whole Foods Market Inc. said Friday that it had extended its tender offer for Wild Oats Markets Inc. for a fourth time as it waits for a hearing that will decide if it can go ahead with its proposed acquisition.

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The offer to acquire all of Wild Oats’ outstanding shares for $18.50 each, or about $565 million, will now expire on August 10, instead of July 20 as previously announced.

Whole Foods, the largest natural and organic grocer in the United States, said in February that it planned to buy Wild Oats to better compete with larger traditional grocers, which are increasingly encroaching into its organic and prepared foods niches.

But the Federal Trade Commission filed a suit to block the deal on concerns it would eliminate competition in many local markets around the United States. It sought a temporary restraining order and preliminary injunction.

The FTC alleges that Whole Foods' founds and chief executive, John Mackey, told his board of directors that taking over the rival would eliminate price competition in some markets and prevent another large grocer from building a formidable competitor.

The FTC also disclosed that Mackey regularly made anonymous Internet postings that at times bashed Wild Oats. Whole Foods' board of directors is conducting an independent investigation into Mackey's online postings, and the company confirmed that the Securities and Exchange Commission has launched an inquiry into the postings.

Whole Foods has said it will fight the FTC's allegations, and Wild Oats has said that it still hopes the acquisition will go through.

A hearing in U.S. District Court for the District of Columbia on the injunction is scheduled to conclude on August 1.

Whole Foods said that as of Thursday, 17,049,990 Wild Oats shares, or 57 percent of those outstanding as of April 27, had been tendered and not withdrawn.

Reuters contributed to this report.

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