Activist JANA Partners To Make ~$300M On Whole Foods Stake Should Amazon Deal Go Through

Jun 16 2017 | 11:51pm ET

Amazon’s surprise $13.7 billion bid for Whole Foods Market on Friday sent the grocer’s stock up 29% to $42.68 and, should it go through, represents a roughly $300 million payday for Barry Rosenstein’s activist hedge fund JANA Partners.

JANA upped its stake in the grocer to nearly 9% back in April and held around 26.1 million shares as of the end of May, according to Reuters, worth around $794.5 million. As Whole Foods’ second-largest shareholder, the fund immediately began calling for new leadership, improved performance and the implementation of steps to increase shareholder value - including strategic alternatives.

Based on Amazon’s per-share cash offer of $42, JANA’s stake would be worth $1.09 billion. 

JANA generally prefers to work with the management teams it targets for action quietly, rarely engaging in proxy battles. With Whole Foods, however, JANA took a much more public stance with its recommendations.

Partly as a result, there has been little love lost between the fund, which called for a wholesale shakeup of the company’s management, and Whole Foods CEO John Mackey, who referred to hedge fund managers in general as “greedy bastards” and JANA Partners in particular as “ringwraiths” in a June interview with Texas Monthly

Founded by Rosenstein in 2001, New York-based JANA manages more than $7 billion in primarily activist strategies. 

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