Peet’s Coffee & Tea Not To Raise Offer For Diedrich
Published:07-December-2009
By Staff Reporter
To leave in place its exchange offer to acquire Diedrich for $26 per share
Peet’s Coffee & Tea in response to Diedrich Coffee proposal said that it will not further enhance its proposal. Peet’s further added that it will leave in place its exchange offer to acquire Diedrich for a combination of cash and stock valued at $26 per share.
Under the terms of GMCR’s proposal, GMCR and Diedrich will be required to file for Hart-Scott-Rodino antitrust clearance, a regulatory process that GMCR did not undergo when it acquired Tully’s Coffee wholesale business and Timothy’s Coffees two of the three other Keurig licensees with whom it previously competed.
Under the terms of Peet’s pending exchange offer, which will continue even if Diedrich terminates the merger agreement, for each share of Diedrich common stock tendered and accepted in the exchange offer or converted in the succeeding merger, Peet’s will pay a combination of $17.33 in cash and a fraction of a share of Peet’s common stock having a value of approximately $8.67, such fraction not to exceed 0.315 of a share of Peet’s common stock.
Based on the closing price of Peet’s common stock on December 7, 2009, this represents a value of $26 per Diedrich share. Following any termination of Peet’s merger agreement with Diedrich, neither of the financing arrangements previously disclosed by Peet’s will remain in effect. Peet’s is negotiating a revised financing arrangement for the pending exchange offer and expects to announce the completion of that negotiation in the near future.
Patrick O’Dea, president and CEO of Peet’s, said: “We believe that a combination of Peet’s and Diedrich would enhance competition in the K-Cup single serve market, benefiting retail trade customers, consumers and the future growth of the Keurig single cup brewing system. We expect to be in a position to close a transaction within a matter of weeks.
“Conversely, it is our view that there are significant antitrust issues and resulting timing and closure risks associated with GMCR’s competing proposal. In the meantime, while GMCR’s proposal undergoes regulatory review, our original exchange offer of $26.00 in cash and stock will remain in place and we stand ready to close a transaction swiftly.
"We remain excited by the opportunity to compete in the single serve K-Cup market through an acquisition of Diedrich and believe this course is in the best interests of the shareholders of both companies.”
