Notable Mergers and Acquisitions of the Day 12/8: GMCR/DDRX/PEET, SPG, NOV, TLB/BPW

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GMCR Hot Sheet

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Green Mountain Coffee Roasters, Inc. (NASDAQ: GMCR) today announced that it has entered into a definitive merger agreement to acquire Diedrich Coffee, Inc. (NASDAQ: DDRX) for $35 per share in cash pursuant to a cash tender offer, in a transaction with a total value of approximately $290 million.

Concurrent with entering into the merger agreement with GMCR, Diedrich terminated its previously announced merger agreement with Peet's Coffee & Tea, Inc. (NASDAQ: PEET) following the expiration of the negotiation period granted to Peet's under the terms of the Prior Agreement. In accordance with the terms of the Prior Agreement, on behalf of Diedrich, GMCR paid a termination fee of $8,517,000 to Peet's in connection with such termination.

Under the terms of the merger agreement, GMCR will acquire all of the outstanding shares of Diedrich common stock for $35 per share in cash pursuant to a cash tender offer, with no financing and no due diligence contingencies. GMCR intends to fully finance this transaction through cash on hand and GMCR's existing bank lines of credit. The full terms and conditions of the GMCR offer will be contained in the Schedule TO which is expected to be filed with the U.S. Securities and Exchange Commission later this week. GMCR anticipates that this transaction will be neutral to slightly accretive within the first twelve months following the close, excluding one-time transaction expenses, and accretive thereafter.

The transaction is subject to customary closing conditions, including, among others, regulatory approvals. GMCR noted that it has thoroughly evaluated this transaction and is confident it can consummate the transaction promptly in early 2010. In that regard, the merger agreement includes a graduated reverse break-up fee structure such that the reverse break-up fee starts at $8,517,000 for a termination prior to February 15, 2010 and increases by $1,000,000 in each subsequent 60 day period through June 15, 2010, in each case payable by GMCR to Diedrich in the unlikely event that regulatory approvals are not obtained under the terms and conditions of the merger agreement.

BofA Merrill Lynch is serving as financial advisor to GMCR on this transaction and Ropes & Gray LLP is serving as its legal advisor. Houlihan, Lokey, Howard & Zukin Capital, Inc. is serving as financial advisor to Diedrich Coffee and Gibson, Dunn & Crutcher LLP is serving as legal advisor.

Yesterday, December 7, 2009, Peet's Coffee said that they Wouldn't boost their bid for Diedrich.
Simon Property Group, Inc. (NYSE: SPG) announced today that it has entered into a definitive agreement whereby Simon will acquire all of the outlet shopping center business of Prime Outlets Acquisition Company and certain of its affiliated entities in a transaction valued at approximately $2.325 billion, including the assumption of Prime Outlets' existing indebtedness and preferred stock.

Under the terms of the agreement, Simon will pay equity consideration of approximately $0.7 billion for the owners' interests in Prime Outlets. The equity consideration to Prime Outlets' owners will generally be comprised of 80% in cash and 20% in SPG common operating partnership units, which will be based on a ten day trading average of SPG common stock shortly before closing, subject to a 10% collar.

Prime Outlets is a leading owner, manager, operator and developer of outlet centers in the U.S. The Prime Outlets portfolio includes 22 high quality outlet centers located in major metropolitan markets such as Washington D.C., Baltimore, MD and San Antonio, TX and popular tourist destinations such as Orlando, FL and Williamsburg, VA. As of June 30, 2009, Prime Outlets' centers were 92% occupied and generated annual sales per square foot of approximately $370.

Commenting on the transaction, David Simon, SPG Chairman and Chief Executive Officer, stated "Prime Outlets is an excellent opportunity for Simon as it represents a strong strategic fit for our existing Premium Outlet portfolio and enhances our leadership position in the outlet business. Following the completion of this transaction our outlet portfolio will have 63 centers comprising approximately 25 million square feet."

Simon expects the transaction to be immediately accretive to Funds from Operations.

Simon intends to fund the cash portion of the equity consideration using its existing sources of capital. Simon was advised in this transaction by UBS Investment Bank and JP Morgan and was represented by Fried, Frank, Harris, Shriver & Jacobson LLP.
National Oilwell Varco, Inc. (NYSE: NOV) announced today that it has acquired two private businesses serving the international oil and gas industry, for total consideration of approximately $160 million in cash.

Hochang Machinery Industries Co., Ltd. is a manufacturing and fabrication business with facilities in Ulsan and Geoje, South Korea. Hochang has been a high-quality supplier of equipment fabrication services to National Oilwell Varco, Inc. and Asian drilling rig builders for several years, employing approximately 600 people. Its acquisition is expected to strengthen National Oilwell Varco's fabrication capabilities within its Rig Technology segment, which is predominantly engaged in providing drilling and well remediation equipment to the oil and gas industry worldwide.

South Seas Inspection (S) Pte. Ltd. is a Singapore based inspection, repair and maintenance provider to the oil and gas industry with approximately 140 employees and operations in seven countries, including Singapore, Brazil and Azerbaijan. Its acquisition will complement National Oilwell Varco's Petroleum Services and Supplies segment by expanding regional coverage and adding new derrick inspection and assembly services.
BPW Acquisition Corp. (AMEX: BPW), a publicly held special purpose acquisition company, today announced that it has entered into a definitive merger agreement pursuant to which it will be acquired by The Talbots, Inc. (NYSE: TLB), a specialty retailer of women's apparel. Upon closing the combined company will retain Talbots' ticker symbol and will trade on the New York Stock Exchange.

Under the terms of the merger agreement, the proceeds of BPW's cash-in-trust of approximately $350 million, in conjunction with additional financing obtained by Talbots, including a new $200 million revolving credit facility for which a commitment has been received from GE Capital, will be used to retire all of Talbots' existing debt. In addition, Talbots will acquire all of the outstanding shares of Talbots common stock held by AEON (U.S.A.), Inc., which represents a more than 54% stake currently. BPW common shares will be exchanged for the equivalent of $11.25 per BPW share in Talbots' common shares within a floating exchange ratio range of between 0.9000 - 1.3235 Talbots shares per BPW share, based on the trading prices of Talbots common stock prior to the BPW stockholders meeting. Pro forma for the merger, BPW's shareholders will own between approximately 60-69% of Talbots' common shares.

As part of the transaction, the Sponsors and certain directors of BPW will surrender an aggregate of 1,852,941 shares of BPW common stock, or approximately 30% of the shares held by the Sponsors and such directors, for no consideration.

The transaction also contemplates that, following receipt of BPW stockholder approval, Talbots will undertake an exchange offer for existing BPW warrants held by public warrantholders. The exchange offer will provide that 50% of the BPW warrants held by public warrantholders will be exchanged for the equivalent of $1.125 per BPW warrant in Talbots common shares through a floating exchange ratio of between .09000 - .13235 Talbots shares per BPW warrant, based on the trading prices of Talbots common stock prior to the BPW stockholders meeting, that the balance of BPW warrants held by public warrantholders would be exchanged for new Talbots warrants with new terms, including a term of 5 years and a strike price set at a premium of 30% to the closing valuation of Talbots' common stock as determined under the merger agreement. The Sponsors and certain directors of BPW have agreed to exchange all of their warrants for Talbots common stock at the same floating exchange ratio of between .09000 - .13235 Talbots shares per BPW warrant.

Trudy Sullivan will remain President and Chief Executive Officer of Talbots, and will continue to lead the current management team, which is successfully implementing a turnaround of the company.