DealZone

Diedrich Coffee battle seen far from over

There’s a lot of fuss lately over a coffee company with a market capitalization of just $190 million.

Peet’s Coffee & Tea Inc again raised its bid for Diedrich Coffee, this time to $32.50 a share, besting the $32 per share, all cash offer from Green Mountain Coffee.

Diedrich’s shares are trading above the offer prices at $33.99, up 87 cents, or 2.63 percent, suggesting that investors expect another bid from Green Mountain.

Stifel Nicolaus analysts said they expected Diedrich to declare the latest Peet’s Coffee offer as superior, prompting Green Mountain to come back with yet another bid.

The analysts said it would have to be “meaningfully higher” than the current Peet’s cash-and-stock offer given the potential for upside if Peet’s stock rises. 

Coffee wars: Peet’s, Green Mountain battle over Diedrich

There’s a big war brewing over single-serve coffee brand Diedrich Coffee Inc.   

Green Mountain Coffee Roasters Inc on Tuesday raised its bid for Diedrich to $265 million, or $32 a share in cash, to challenge a sweetened offer from Peet’s Coffee & Tea Inc on Monday. Peet’s cash-and-stock offer is valued at $30.41 per share.
    
Diedrich, which makes and sells K-Cup refills for Green Mountain Coffee’s single-cup Keurig brewer system, said its board is “continuing to analyze the two offers” to determine whether Green Mountain’s offer “continues to be a superior proposal.”
    
Peet’s, of course, said it thinks its cash-and-stock proposal is superior “given the greater certainty of an faster closing and the potential upside for Diedrich’s shareholders through the Peet’s stock component.” It has until Friday to make a revised offer.
 
Meanwhile, Green Mountain said its all-cash offer is better than Peet’s because Peet’s proposal is subject to market fluctuations in its stock price. 

Earlier this month, Peet’s had agreed to buy Diedrich for $26 per share, in a bid to cash in on Diedrich’s status as a licensee of Green Mountain’s fast-growing single-cup coffee brewing systems. Green Mountain emerged as an interloper with a competing offer.