GMCR Adds More Sugar To Diedrich Offer
Increases bid to $35 per share in cash with a total value of approximately $290m
Green Mountain Coffee Roasters (GMCR) has submitted an enhannced proposal to acquire Diedrich Coffee for $35 per share in cash pursuant to a cash tender offer, in a transaction with a total value of approximately $290m.
GMCR has been informed by representatives of Diedrich’s Board that this offer continues to constitute a superior proposal, as defined in the existing merger agreement between Diedrich and Peet’s Coffee & Tea, to Peet’s November 30, 2009 cash and stock proposal.
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.
Under the terms of GMCR’s proposal, GMCR will acquire all of the outstanding shares of Diedrich common stock, with no financing and no due diligence contingencies. The transaction will be fully financed through cash on hand and GMCR’s existing bank lines of credit. GMCR intends to commence the cash tender offer promptly after signing a merger agreement with Diedrich.
GMCR noted that it has thoroughly evaluated this transaction and is confident it can consummate the transaction promptly in early 2010.
Earlier this week Peet’s Coffee & Tea has reinstated and enhanced its previously expired proposal to acquire Diedrich Coffee for stock and cash valued at $32.5.
According to GMCR, its all-cash proposal provides Diedrich shareholders with more value and greater certainty than Peet's November 30, 2009 proposal. Peet’s proposal had a significant stock component and its shares have demonstrated substantial volatility over the last 90 days, said GMCR.
Lawrence Blanford, president and chief executive officer of GMCR, said: “We were pleased to learn that Diedrich’s Board of Directors has determined that our $35 per share offer continues to constitute a superior proposal to Peet’s November 30, 2009 cash and stock proposal.
We look forward to working with the Diedrich Board to complete this transaction promptly for the benefit of stakeholders of both companies.”
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