About one month after Whole Foods Market announced a major board reboot, adding five new directors, comes recent news Amazon is buying the high-end supermarket chain.
The two companies said the definitive merger agreement includes Amazon acquiring Whole Foods for $42 per share in an all-cash deal worth nearly $14 billion, including Whole Foods’ net debt.
Whole Foods had a long-term plan in its proxy filing from last year to refresh the board after a few years, but apparently accelerated the process following activist hedge fund Jana Partners buying a big stake in the company and putting pressure on management to make changes, says Christopher Hewitt, a corporate attorney for Tucker Ellis who is a merger and acquisition strategic advisor to boards and management.
Indeed, the company said in a May statement about the board changes that the move was designed “to help ensure that the company’s board has the best mix of skills and experience necessary to support Whole Foods Market’s leadership team in accelerating shareholder value creation.”
What’s interesting, says Hewitt, is the company was “going down a dual track of refreshing the board to fight off a Jana, while at same time negotiating with Amazon to do a deal.”
Hewitt suspects the deal didn’t take just a few weeks to put together, and some media outlets are reporting Whole Foods and Amazon were talking last year.
“Whole Foods has had its issues, but as far as corporate governance they were doing enough with the board refreshment,” he explains, adding that the board seems to have "acted appropriately with this deal.”