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The FTC said Friday it will appeal Judge Paul L. Friedman's decision to deny the Commission's request for an injunction to stop the $565 million ($18.50 per share) merger between natural foods grocers Whole Foods and Wild Oats, but the judge denied the FTC's request for a stay of his decision pending that appeal. Shares of Wild Oats soared almost 18% to close at $17.92 on Friday; Whole Foods shares gained 7.6% to close at $44.30. The FTC maintains that because the combination would unite the two main players in natural foods, it would harm the consumer by stifling competition. Judge Friedman decided, however, that because the grocers' larger, more conventional competitors also operate in the natural space, there is no existing "premium" natural food market to which such an antitrust concern would apply. The judge agreed with the merging companies that "there are firms a lot bigger and more significant than Wild Oats that directly impact Whole Foods on a day-to-day basis," said Wild Oats lawyer Clifford Aronson, who read Friedman's decision. If the U.S. Court of Appeals for the District of Columbia refuses to grant the FTC an emergency stay by noon Monday, the merger can proceed. "It's unlikely [the FTC is] going to prevail," said law professor Anthony Sabino.

Sources: Wall Street Journal, Denver Post, TheStreet.com
Commentary: Judge Refuses to Block Whole Foods-Wild Oats MergerFTC Case Strong Against Whole Foods/Wild Oats Merger -- AnalystFTC Lets Whole Foods Trade Secrets Out Via Microsoft Word
Stocks/ETFs to watch: WFMI, OATS. Competitors: KR, SVU, SWY. ETFs: XLP, VDC, PSL
Earnings call transcripts: Whole Foods Market F3Q07

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Source: Judge to FTC: No Stay of Ruling on Whole Foods Merger