Tomorrow and the day after will likely mark the beginning of the end of Whole Foods Market Inc.'s $565 million takeout of Wild Oats Markets Inc.

The preliminary injunction hearing on the transaction begins tomorrow, scheduled after the Federal Trade Commission indicated on June 7 it was seeking a temporary restraining order against the natural products supermarket deal. The hearing is scheduled to conclude on Wednesday. The judge, though, will render his decision in a month, perhaps a little sooner, said an antitrust partner.

"It's not a ruling on whether or not the deal is illegal or legal. It's to determine if there is preliminary sufficient cause to prove there's cause for irreparable harm," said the lawyer.

If the judge decides in favor of the FTC, the case will go back to an administrative law judge at the FTC to decide.

"The FTC will win," another antitrust partner predicted. There are too many damning documents in the case, he said, and the FTC does not need to prove without any doubt that competition in the natural products retailing space will be adversely impacted.

Still, the first antitrust partner noted last week that the documents on the case are sealed, and he was circumspect about the FTC's arguments against the deal.

Announced on Feb. 21, the tender values Boulder, Colo.-based Oats at $18.50 a share. At press time, Oats traded at $14.95 per share.

The deal received a second on March 15, and in between news of the second and this month, damaging revelations surfaced about Whole Foods Chairman and Chief Executive Officer John Mackey's Internet alter ego, which he used on Oats's Yahoo message board to disparage the smaller competitor and pump up Whole Foods.

The news about Mackey has been tabloid fodder for the financial press, not to mention practically the mainstream one. And that, combined with what Mackey says on his blog on the company's Website (prior to the temporary suspension of the forum) and internal corporate e-mails the FTC unearthed during its investigation, may provide antitrust authorities with all the ammunition they need, the second attorney said.

The agency only needs to establish that there are serious concerns about maintaining a competitive environment, noted the first antitrust attorney.

Needless to say, Mackey, through his own documented opinions, has demonstrated the threat to the space should Whole Foods succeed in taking out Oats.

Austin, Texas-based Whole Foods and Oats, both natural food and products retailers, operate nearly 200 stores and110, respectively. Last Wednesday, Whole Foods opened another store-in the Northalsted neighborhood of Chicago.

A Whole Foods spokeswoman could not be reached for comment.

Meanwhile, for what it may be worth, on July 20, Whole Foods extended the expiration of its tender for Oats to Aug. 10. Of course, getting investors to tender is not an issue, although Whole Foods almost certainly wishes it, rather than the FTC, were.

Alden Atkins, the Vinson & Elkins antitrust partner working on the Whole Foods/Oats case, could not be reached for comment.

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