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How the Amazon-Whole Foods Deal Went Down

Jul 07, 2017

Whole Foods (wfm) first approached Amazon (amzn) to do a deal, Amazon was militant about leaks, and the e-commerce giant beat out two industry players and four private equity firms in its pursuit of Whole Foods.

These are just some of the juicy details revealed in a proxy that Whole Foods filed with the SEC Friday morning. In the filing Whole Foods provides a thorough timeline of the deal, which gives the most comprehensive view yet of how the acquisition went down. Highlights below:

April 10, 2017: Activist investor Jana Partners discloses that it has acquired 8.8% of the company’s stock. A week later Whole Foods retains Evercore as its financial advisor.

April 18: CEO John Mackey and then-chairman John Elstrott receive a letter from an “industry participant” that the filing calls “Company X.” Company X expresses interest in exploring “strategic opportunities and a partnership.” (Reuters has reported that Albertsons is Company X. Albertsons declined to comment on the matter to Fortune.)

April 21: Earlier in the week, Mackey, EVP of operations Ken Meyer, and an outside consultant talk about recent media reports that say Amazon may have previously considered buying Whole Foods. The consultant offers to make an introductory phone call and connects with Amazon SVP of corporate affairs Jay Carney to see if the company would be interested in a meeting.

April 20-May 4: Whole Foods receives inquiries from four private equity firms that say that if the company wants to do a leveraged buy-out or other transaction, they might be interested.

April 24: The Whole Foods board meets to discuss the letter from Company X and an upcoming meeting with Jana. The same day the consultant talks with Amazon’s VP of worldwide corporate development Peter Krawiec.

April 26: Jana meets with Mackey and other members of the management team at Whole Food's headquarters. Jana demands changes to the board of directors.

April 27: Whole Foods and Amazon enter into a non-disclosure agreement.

April 28: Whole Foods' Meyer and Amazon's Krawiec have a phone call to discuss a meeting between the two companies. The same day, the Whole Foods board meets in person at its headquarters in Austin to discuss, among other matters, Jana and Company X. Mackey also tells the board that he and members of the executive team are planning to meet with Amazon during the coming weekend.

April 30: Mackey, Amazon CEO Jeff Bezos, and other senior management meet in Seattle. No proposal for a transaction is made.

May 1-May 8: The board meets several times with its law firm and Evercore to discuss Jana’s demands, Company X, and attempts to recruit new board members. Members of the board talk with a search firm to talk about board candidates.

May 4: Executives from Whole Foods and Amazon meet in Austin for a due diligence session. On May 7 they sign more NDAs and more due diligence is provided to Amazon.

May 8: Elstrott receives an email from a second industry player, what the proxy calls Company Y, inquiring whether they’re interested in a business relationship.

May 9: Jana says it is not interested in the terms presented by Whole Foods.

May 18: Sulzberger, Mackey, and Evercore meet with Company X, which suggests a merger that would price the company at $35-40 per share. The same day Meyer and EVP of operations David Lannon have a phone call with Company Y.

May 23: Whole Foods receives a written offer from Amazon to acquire the grocer at $41 a share. In its letter, Amazon says it has the right to terminate talks if there are any leaks or rumors. The board meets the next day to discuss.

May 25: Goldman Sachs, which is advising Amazon, calls Evercore to stress that Amazon “was very sensitive with respect to confidentiality, not willing to engage in a multiparty sale process and had submitted what they believed to be a very strong proposal.”

May 30: The board meets in New York and discusses Amazon, Company X, Company Y, and the four private equity firms. Amazon’s concern about leaks is stressed. The board decides to counter-propose a $45/share offer to Amazon, which is conveyed to Goldman. Goldman expresses its disappointment at the counter-offer.

June 1: Evercore and Goldman talk about the counter-offer and Goldman says Amazon “was considering other opportunities instead of acquiring the Company and had been considering whether to respond to the Company’s $45.00 counter proposal at all or to pursue other opportunities.” Goldman says that $42/ share is Amazon’s best and final offer and wants a prompt response. The board meets to discuss and decides to move forward at $42/share. Over the next week and a half due diligence continues.

June 12: Sulzberger, Mackey, and director and Panera CEO Ron Shaich have a call with Amazon and both companies' legal teams to discuss the “major open issues,” which included the amount and triggers for the termination fee. Later in the day Whole Foods executives meet in Seattle to talk operations.

June 15: The board has a call with Evercore and its law firm to discuss the drafted agreement. The board unanimously agrees to the merger. The next day the deal is announced.

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