Peet's Coffee (PEET) Shares Continue Higher; Is More Bidding in the Works?
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According to Bloomberg Monday, there still might be more bidding in store for one of the world's largest coffee roasters, Peet's Coffee & Tea (Nasdaq: PEET).
Last week, Peet's got a $73.50 per share offer from Joh. A. Benckiser, valuing the company at about $1 billion based on 13.25 million shares outstanding. Currently, Peet's shares are trading 2.7 percent above that level, to the mid-$75s.
The deal values Peet's at 21 times EBITDA, the richest valuation for a non-alcoholic beverage maker with a market cap above $500 million, according to Bloomberg-compiled data.
One Wedbush analyst thinks coffee giant Starbucks (Nasdaq: SBUX) might make an offer for Peet's in an effort to gain a more expensive grocery store brand as well as prevent further expansion of Peet's shops (of which Peet's has about 190 in the U.S.). Another analyst, from Oscar Gruss, said Starbucks might shell out as much as $80 per share.
Other data showed Peet's commands about $1 more per 12-ounce bag of coffee on grocery shelves, as consumers still see the name as a premium to Starbucks.
But the rich valuation and steep multiples might keep Starbucks back. Data from the most recent quarter showed Starbucks with $2.23 billion in cash and short-term investments, versus $549.6 million in debt.
Peet's is up 0.2 percent Monday; shares of Starbucks is down 1.4 percent.
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Last week, Peet's got a $73.50 per share offer from Joh. A. Benckiser, valuing the company at about $1 billion based on 13.25 million shares outstanding. Currently, Peet's shares are trading 2.7 percent above that level, to the mid-$75s.
The deal values Peet's at 21 times EBITDA, the richest valuation for a non-alcoholic beverage maker with a market cap above $500 million, according to Bloomberg-compiled data.
One Wedbush analyst thinks coffee giant Starbucks (Nasdaq: SBUX) might make an offer for Peet's in an effort to gain a more expensive grocery store brand as well as prevent further expansion of Peet's shops (of which Peet's has about 190 in the U.S.). Another analyst, from Oscar Gruss, said Starbucks might shell out as much as $80 per share.
Other data showed Peet's commands about $1 more per 12-ounce bag of coffee on grocery shelves, as consumers still see the name as a premium to Starbucks.
But the rich valuation and steep multiples might keep Starbucks back. Data from the most recent quarter showed Starbucks with $2.23 billion in cash and short-term investments, versus $549.6 million in debt.
Peet's is up 0.2 percent Monday; shares of Starbucks is down 1.4 percent.
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