A federal appeals court late Thursday cleared the way for Whole Foods to complete its $671 million buyout of smaller rival Wild Oats, removing the last legal obstacle to the deal.

The three-judge panel of the U.S. Court of Appeals for the D.C. Circuit denied a request by the Federal Trade Commission to delay the deal pending the outcome of an appeal. Whole Foods' lawyers argued that such a ruling would have killed the deal because the financing expires Aug. 31.

Last week, a federal judge refused to block the transaction - a decision that federal regulators quickly appealed. The FTC claimed that the merger of the nation's two largest natural- and organic-food stores would lead to higher prices and lower quality.

"The FTC must show that the district court, in denying the preliminary injunction, abused its discretion by making clearly erroneous factual findings or errors of law," the panel wrote in a one-paragraph decision. "At this stage, the FTC has failed to meet that burden."

This week, Austin, Texas-based Whole Foods extended its tender offer for Wild Oats shares to 3 p.m. MDT on Monday. After that, Whole Foods can begin integrating the two companies.

"We look forward to closing this merger and believe the synergies gained from this combination will create long-term value for our customers, vendors and shareholders, as well as exciting opportunities for our new and existing team members," Whole Foods Chief Executive Officer John Mackey said in a statement.

FTC spokeswoman Claudia Bourne-Farrell didn't immediately return a message left at her office after hours.

The companies won't have any conversations about which, if any, Wild Oats stores will close or the fate of Wild Oats' corporate headquarters employees in Boulder until the merger closes, said Sonja Tuitele, a spokeswoman for Wild Oats.

The FTC also has initiated an administrative proceeding to block the merger, but legal experts say that could take as long as a year. By then, Whole Foods would already have integrated the companies and it would be too late to unwind the deal.

Whole Foods plans to close as many as 30 of Wild Oats' stores, the FTC inadvertently disclosed earlier this month in a court filing. Whole Foods says it hasn't decided which, if any, Wild Oats stores it plans to close. But it said in a court filing this week that more than half the stores under consideration for closure are less than 25,000 square feet or "not located in high-traffic or appealing areas."

What's next

• Whole Foods' tender offer for outstanding Wild Oats shares expires at 3 p.m. MDT on Monday. After that, Whole Foods can close the deal and begin integrating the two companies.

Wild Oats

OATS: Nasdaq

$18.07- 2 cents

davisj@RockyMountainNews.com or 303-954-2514