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Goldman Sachs, mocked by prospective client Whole Foods, ended up advising Amazon

John Detrixhe

Whole Foods CEO John Mackey, who once lived in a vegetarian commune, is wary of Wall Street. In a lengthy profile by Texas Monthly, he says that Goldman Sachs CEO Lloyd Blankfein was eager to court his business when Whole Foods first came under pressure from an activist investor to look for a takeover. He doesn’t seem to have been much impressed by the overtures.

The CEO of Goldman [Lloyd Blankfein] wanted to meet with me because, of course”—he adopts a sardonic tone, a tic that tends to make his handlers stiffen up—“ ‘Goldman Sachs would love to represent you. If you guys are going to be sold, we’d love to make one hundred million dollars doing that. Don’t forget your buddies at Goldman Sachs!’ ”



According to Texas Monthly, Goldman says that no such meeting ever occurred. What is certain to have taken place, however, is that just as Texas Monthly was coming out with its July cover story on Mackey and Whole Foods, Amazon agreed to buy the company for $13.7 billion, with Goldman advising Amazon CEO Jeff Bezos on the takeover.

During the decades since Mackey founded Whole Foods, it has emerged as a cultural icon and a force in its industry. But the grocery chain has suffered the past seven quarters with slowing sales, and its stock price has languished. Mackey nonetheless has some harsh words for Jana Partners, the activist investor that pressure him to shake up his company, referring to them in the Texas Monthly interview as “greedy bastards” who wanted to make money from a forced sale. He describes his company’s battle as a “morality play between conscious capitalism and greedy, short-term financial capitalism.”

Meanwhile, there are few beneficiaries of financial capitalism that have done better than Goldman Sachs, which was founded in the late 19th century and went public in 1999. The investment bank led global M&A rankings last year and, based on year-to-date figures from FactSet, it’s on pace to do so again this year—this time with a little help from Amazon and Whole Foods.

 

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