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Analysts Say Competing Grocers May Try To Derail Amazon-Whole Foods Deal With Bidding War

Whole Foods in Markham, Ontario

Whole Foods Market's stock price has been on the rise ever since Amazon announced plans to pay $42/share to acquire the company in a $13.7B deal Friday. Now the high-end grocers' stock has jumped so high its causing some analysts to question whether Amazon's move could trigger a bidding war.

Barclays analyst Karen Short upgraded Whole Food’s stock to overweight and increased her target price to $48, about 14% above Amazon’s bid, in anticipation that another buyout bid may appear, MarketWatch reports

Short said there are not many companies that could actually outbid Amazon, but she predicted some competiting grocers or retailers may try to bid and/or derail the deal by making it more expensive for Amazon.

These predictions are being confirmed by increased investor activity; Whole Food’s stock closed Friday up 29.1%, above Amazon’s bid at $42.68.  Mutual-fund firm Neuberger Berman agrees with Short’s prediction, and also said it expects a bidding war for Whole Foods to ensue. Major grocery stocks entered a free fall Friday after Amazon’s announcement, and Short said she expects those retailers to do what they can to stop the deal.