(Bloomberg)—Whole Foods Market Inc. shares surged the most in more than two years after activist investor Jana Partners LLC acquired a stake of 8.3 percent and suggested that the organic-food grocer may want to put itself up for sale.
The investment firm announced the holding in a filing on Monday, saying it would seek talks with management and push for a review of Whole Foods’ strategic alternatives. Jana also may nominate at least three directors in a bid to help foster a turnaround.
The supermarket chain, which helped pioneer the organic-food movement, has been grappling with its worst sales slump in more than a decade. Six straight quarters of declining same-store sales have forced the company to close stores and rein in costs. A record-setting bout of food deflation has put additional pressure on the entire grocery industry.
In announcing its investment, Jana vowed to address the weak performance and potentially shake up the board. The New York-based firm also will examine real estate and Whole Foods’ new small-store format called 365.
Whole Foods shares gained as much as 11 percent to $34.40 in New York, the most since November 2014. The stock had been up 1 percent this year through the end of last week.
Larger mainstream grocers, including Kroger Co. and Wal-Mart Stores Inc., continue to advance on Whole Foods’ organic turf, weighing on sales. Whole Foods has sought to fight back by offering more discounts and starting the new 365 chain, which is aimed at younger shoppers.
To contact the reporters on this story: Nick Turner in New York at [email protected] ;Craig Giammona in New York at [email protected] To contact the editors responsible for this story: Nick Turner at [email protected] Lisa Wolfson
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