The Amazon.com Inc. (NASDAQ: AMZN) buyout of Whole Foods Market Inc. (NASDAQ: WFM) was partially to flank Wal-Mart Stores Inc. (NYSE: WMT), which counts on groceries for a large portion of its U.S. revenue. Speculation has arisen that Walmart will try to turn the tables and make a higher bid for the upscale food retailer.
A JPMorgan research report that said:
We do think there is a chance that Walmart makes a bid. WMT stands out as the only company in our coverage with the means and motive to counterbid, but the motive is ultimately more driven by a defensive strategy.
Walmart has over 4,000 locations in the United States, and Whole Foods only 420. A bid for Whole Foods would be a defensive move by America’s largest retailer more than anything else.
Walmart could face an antitrust charge if it were to make an offer, although the charge would be a stretch. Several large grocery retailers, led by Kroger Co. (NYSE: KR), have a large part of the market.
Walmart would need to top Amazon’s $13 billion offer, which is about $43 a share. The speculation from JPMorgan has not been taken seriously by the market so far. Whole Foods stock was basically flat over the past few days, and last seen at $43.01 on Friday. It has a 52-week trading range of $27.67 to $43.64 and a consensus price target of $38.00.
Sponsored: Tips for Investing
A financial advisor can help you understand the advantages and disadvantages of investment properties. Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
Investing in real estate can diversify your portfolio. But expanding your horizons may add additional costs. If you’re an investor looking to minimize expenses, consider checking out online brokerages. They often offer low investment fees, helping you maximize your profit.