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The chief executive of Whole Foods Market (WFMI, news, msgs) wrote anonymous online attacks against a smaller rival and questioned why anyone would buy its stock, before Whole Foods announced an offer to buy the other company this year.
The postings on Internet financial forums, made under the name "rahodeb," said Wild Oats Markets (OATS, news, msgs) stock was overpriced. The statements predicted the company would fall into bankruptcy and then be sold after its stock fell below $5 per share.
In February, Whole Foods announced it would buy Wild Oats for about $565 million, or $18.50 per share. All the way
Whole Foods has acknowledged that the postings by "rahodeb" were written by CEO John Mackey.
They were made public this week as part of a lawsuit by the Federal Trade Commission to block Whole Foods from buying Wild Oats on antitrust grounds. Regulators say the sale would combine the two largest organic and natural-foods retailers and raise prices for consumers by concentrating too much power in one company.
Whole Foods, based in Austin, Texas, defended Mackey's postings, saying they were being taken out of context years later.
"Mr. Mackey made those postings from 1999 to 2006 under an alias to avoid having his comments associated with the company and to avoid others placing too much emphasis on his remarks," according to a prepared statement from the company.
The company said many of Mackey's opinions in the postings "now have far less relevance than when they were written. In addition, like most people, Mr. Mackey's opinion about some things has changed over time."
Whole Foods concluded by saying the comments were Mackey's, not those of the company.
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Blog used to bash FTC
One posting, from January 2005, questioned why anyone would buy shares of Wild Oats at their price then of about $8 each, The Wall Street Journal reported."Would Whole Foods buy (Wild Oats)? Almost surely not at current prices," rahodeb wrote. "What would they gain? (Their) locations are too small."
Rahodeb also said the management of the Boulder, Colo., company "clearly doesn't know what it is doing." Wild Oats, he wrote, "has no value and no future."
Mackey has led an unusually public countercharge to the FTC's attempt to block his company's purchase of Wild Oats. He has said both companies compete in a much larger market because many traditional grocers now sell organic and natural foods.
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The blog broadside by Mackey came after the FTC moved to release sealed documents that quoted the CEO telling Whole Foods directors that buying Wild Oats would help the company "avoid nasty price wars" and block a bigger retailer from building a national natural-foods chain.
The FTC lawsuit is pending in U.S. District Court in Washington, D.C.
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