Peet's Coffee (PEET) Raises Bid for Diedrich Coffee (DDRX) to $32 in Cash-And-Stock, Up from $26 Previously
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Peet's Coffee & Tea, Inc. (NASDAQ: PEET) announced today that it delivered to the board of directors of Diedrich Coffee, Inc. (NASDAQ: DDRX) on Sunday, November 22, 2009 a proposal to enhance its previously announced offer to acquire Diedrich. Peet's revised proposal is a cash-and-stock offer valued at $32.00 per share, or a total value of approximately $265 million, based on Peet's closing stock price of $38.00 on Friday, November 20, 2009. Peet's enhanced its proposal in response to notification from Diedrich that it had received a competing offer from Green Mountain Coffee Roasters, Inc. (NASDAQ: GMCR) for $30.00 per share in cash. Diedrich's board of directors concluded on November 20, 2009 that Green Mountain's offer was superior to the original Peet's proposal of $26.00 per share in cash and stock.
"We are confident that the Diedrich board will find our revised proposal to be superior for Diedrich's shareholders," said Patrick O'Dea, President and CEO of Peet's. "With our enhanced proposal, we continue to believe that this acquisition would create significant value for our shareholders. We also remain convinced, perhaps more now than ever, that it would bring needed competition to the single cup K-Cup market that would benefit both consumers and retail trade customers while also accelerating household penetration of the Keurig brewer system, the leading single cup brewer system with over 80% market share in the single cup brewer market."
Under the terms of Peet's revised proposal, Peet's will pay a combination of $19.80 in cash and 0.321 of a share of Peet's common stock for each share of Diedrich common stock tendered and accepted in its exchange offer. The stock component of the revised purchase price is based on a fixed exchange ratio, so the value of that component will increase or decrease with changes in the market price of Peet's common stock. This represents a change from the stock component of the purchase price in the original acquisition agreement, which was based on a fixed dollar value per share of Diedrich common stock subject to a maximum of 0.315 of a share.
"We are confident that the Diedrich board will find our revised proposal to be superior for Diedrich's shareholders," said Patrick O'Dea, President and CEO of Peet's. "With our enhanced proposal, we continue to believe that this acquisition would create significant value for our shareholders. We also remain convinced, perhaps more now than ever, that it would bring needed competition to the single cup K-Cup market that would benefit both consumers and retail trade customers while also accelerating household penetration of the Keurig brewer system, the leading single cup brewer system with over 80% market share in the single cup brewer market."
Under the terms of Peet's revised proposal, Peet's will pay a combination of $19.80 in cash and 0.321 of a share of Peet's common stock for each share of Diedrich common stock tendered and accepted in its exchange offer. The stock component of the revised purchase price is based on a fixed exchange ratio, so the value of that component will increase or decrease with changes in the market price of Peet's common stock. This represents a change from the stock component of the purchase price in the original acquisition agreement, which was based on a fixed dollar value per share of Diedrich common stock subject to a maximum of 0.315 of a share.
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