Whole Foods Activist Jana Exits Stake With $300 Million Profit
The activist investor that Whole Foods Market Inc. Chief Executive Officer John Mackey labeled as “greedy bastards” has sold its stake in the grocer and made a profit of about $300 million in a matter of months.
Jana Partners sold about 26 million shares in Whole Foods over the past month for combined proceeds of about $1.1 billion, according to a regulatory filing Wednesday. The New York hedge fund, founded by Barry Rosenstein, began selling its shares in the supermarket chain on June 19.
The sale caps one of the more colorful recent sagas in activist investing. Jana announced a stake in Whole Foods in April and criticized the chain’s poor performance, vowing to shake up the board and possibly seek a takeover of the company. The move prompted Mackey to reach out to Amazon.com Inc., seeking a friendly buyer. The e-commerce giant agreed to purchase Whole Foods on June 16 for $13.7 billion, marking the biggest acquisition in its history.
With Amazon offering $42 a share for Whole Foods, Jana began winding down its position. The investor offloaded the final 16 million in a block trade at $41.66 apiece on Tuesday, the filing shows.
Jana said in a previous filing that it had acquired its stake for about $794.5 million after disclosing its 8.3 percent stake in Whole Foods in April. That means the firm made about $298.1 million on its investment.
Whole Foods closed Wednesday at $41.76 in New York. Shares in the grocer have jumped nearly 35 percent since Jana disclosed its initial position in April.
The prospects of a rival bid dimmed in the weeks after the Amazon deal was announced. Wal-Mart Stores Inc., one of the few retailers with the resources to mount a counteroffer, decided to bow out of contention, a person with knowledge of the matter said in June.
The fact that Jana began selling its shares a few days after the Amazon deal was announced suggests it too held little hope of a bidding war emerging.
No Love Lost
There was little love lost between Mackey and Jana, which he slammed repeatedly during an interview with Texas Monthly before the Amazon transaction was revealed. In addition to calling the investment firm “greedy bastards,” Mackey said Jana had tried to hurt his reputation.
“They’re putting a bunch of propaganda out there, trying to destroy my reputation and the reputation of Whole Foods, because it’s in their self-interest to do so,” he said in the interview.
“These guys just want to sell us, because they think they can make 40 or 50 percent in a short period of time.”