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Investment firm, former retail execs purchase 9 percent of Whole Foods

Yesterday Whole Foods Market shares jumped more than 10 percent after Jana Partners disclosed it had become the second-largest investor in the company; however, shares lost roughly one-third of the gain today. Jana, as well as individuals it partnered with, disclosed an 8.8 percent stake in the company in SEC filings.

Joining Jana in the filing and purchase were Diane Dietz Suciu, former executive vice president and chief merchandising officer at Safeway; Thomas W. (Tad) Dickson, former chief executive officer of Harris Teeter Supermarkets; Meredith Adler, independent director of Performance Food Group; Mark Bittman, food journalist and former columnist for The New York Times; and Glenn Murphy, former CEO of the Gap.

The group said it acquired the shares because it believes they are "undervalued and represent an attractive investment opportunity." It also said the investor has "substantial experience analyzing and investing in the grocery sector and more broadly across the food and retail sectors."

In the filing Jana said it intends to have discussions with the Whole Foods board of directors and management regarding the company's chronic underperformance for shareholders as well as changing the board and senior management composition. Jana said it plans to optimize Whole Foods' real estate and capital allocation strategies, including the "365" small store format.

Among the other topics Jana said it plans to discuss with the Whole Foods board of directors are improving in-store execution and the company's "suboptimal and cost-disadvantaged grocery procurement and distribution strategy."