Peet’s Coffee & Tea, Inc. (NASDAQ: PEET) announced today
that it delivered to the board of directors of Diedrich Coffee,
Inc. (NASDAQ: DDRX) on Sunday, November 22, 2009 a proposal to
enhance its previously announced offer to acquire Diedrich. Peet’s
revised proposal is a cash-and-stock offer valued at $32.00 per
share, or a total value of approximately $265 million, based on
Peet’s closing stock price of $38.00 on Friday, November 20, 2009.
Peet’s enhanced its proposal in response to notification from
Diedrich that it had received a competing offer from Green Mountain
Coffee Roasters, Inc. (NASDAQ: GMCR) for $30.00 per share in cash.
Diedrich’s board of directors concluded on November 20, 2009 that
Green Mountain’s offer was superior to the original Peet’s proposal
of $26.00 per share in cash and stock.
"We are confident that the Diedrich board will find our revised
proposal to be superior for Diedrich’s shareholders,” said Patrick
O’Dea, President and CEO of Peet’s. “With our enhanced proposal, we
continue to believe that this acquisition would create significant
value for our shareholders. We also remain convinced, perhaps more
now than ever, that it would bring needed competition to the single
cup K-Cup market that would benefit both consumers and retail trade
customers while also accelerating household penetration of the
Keurig brewer system, the leading single cup brewer system with
over 80% market share in the single cup brewer market.”
Under the terms of Peet’s revised proposal, Peet’s will pay a
combination of $19.80 in cash and 0.321 of a share of Peet’s common
stock for each share of Diedrich common stock tendered and accepted
in its exchange offer. The stock component of the revised purchase
price is based on a fixed exchange ratio, so the value of that
component will increase or decrease with changes in the market
price of Peet’s common stock. This represents a change from the
stock component of the purchase price in the original acquisition
agreement, which was based on a fixed dollar value per share of
Diedrich common stock subject to a maximum of 0.315 of a share.
Assuming Peet’s enhanced proposal is found to be superior to
Green Mountain’s offer by Diedrich’s board, Peet’s prior guidance
regarding the impact of the acquisition on its future financial
results will remain substantially unchanged. The acquisition is
expected to be dilutive to earnings in 2010 and accretive
thereafter, and Peet’s estimates for 2011 of $2.00 to $2.20
fully-diluted earnings per share will remain. The estimates are
unchanged since the impact of the higher purchase price of
approximately $0.04 per share due to incremental interest expense
and higher share count is offset by lower amortization expense,
which was lowered after a preliminary valuation of intangibles was
performed that resulted in a longer average life. Peet’s will still
have expected 2010 fully-diluted earnings per share in the range of
$0.80 to $0.90 as previously communicated in connection with the
original offer; however, it is more likely to be in the lower end
of that range. Peet’s plans to finance the cash portion of the
acquisition through a combination of cash on hand (at both
companies) and $140 million of committed debt financing from Wells
Fargo Bank, National Association and Wells Fargo Securities,
LLC.
Under the terms of Peet’s existing merger agreement, Diedrich
notified Peet’s that it had received a superior offer and informed
Peet’s of its intent to terminate the existing agreement after 5:00
p.m. Pacific Time on Friday, November 27, 2009 unless Peet’s
submits a revised proposal that Diedrich’s board of directors
concludes is equal or superior to the Green Mountain proposal. It
was this notification that led to Peet’s revised proposal.
Cooley Godward Kronish LLP is acting as Peet’s legal advisor;
Morgan Stanley and Jesse Capital Management are serving as
financial advisors.
Additional Information and
Where to Find It
This press release is neither an offer to purchase nor a
solicitation of an offer to sell shares of Diedrich. Peet’s has
filed a registration statement on Form S-4 (containing a
prospectus/offer to purchase and certain other offer documents) and
a tender offer statement on Schedule TO with the SEC and Diedrich
has filed a solicitation/recommendation statement on Schedule
14D-9, all with respect to the Offer and the Merger (as defined in
those documents). Diedrich stockholders are urged to read Peet’s
prospectus/offer to purchase and the other offer documents
contained in the registration statement, and Diedrich’s
solicitation/recommendation statement, because they contain
important information that stockholders should consider before
making any decision regarding tendering their shares. The
registration statement (including the prospectus/offer to purchase
and the other offer documents contained therein), the tender offer
statement and the solicitation/recommendation statement contain
important information, which should be read carefully before any
decision is made with respect to the Offer. The registration
statement (including the prospectus/offer to purchase and certain
other offer documents contained therein), as well as the tender
offer statement and the solicitation/recommendation statement, are
available to all stockholders of Diedrich at no expense to them.
The registration statement (including the prospectus/offer to
purchase and other offer documents), the tender offer statement and
the solicitation/recommendation statement are available for free at
the SEC’s web site at www.sec.gov. Free copies of the prospectus
and offer to purchase (and other offer documents) are also
available from Peet’s by mail to Peet’s Coffee & Tea, Inc.,
1400 Park Avenue, Emeryville, CA 94608, attention: Investor
Relations, and free copies of the Solicitation/Recommendation
Statement are available by Diedrich by mail to Diedrich Coffee,
Inc., 28 Executive Park, Suite 200, Irvine, CA 92614, attention:
Investor Relations. In addition, the prospectus/offer to purchase
(and other offer documents) may also be obtained free of charge by
directing a request to the Information Agent for the offer, Laurel
Hill Advisory Group, LLC, 100 Wall Street, 22nd floor, New York, NY
10005 at 1-888-742-1305 (toll free). Continental Transfer &
Trust Company is acting as depositary for the tender offer.
In addition to the foregoing materials filed with the SEC,
Peet’s and Diedrich file annual, quarterly and special reports,
proxy statements and other information with the SEC. Investors may
read and copy any reports, statements or other information filed by
Peet’s or Diedrich at the SEC public reference room at 100 F
Street, N.E., Washington, D.C. 20549. Please call the SEC at
1-800-SEC-0330 for further information on the public reference
room. Peet’s and Diedrich’s filings with the SEC are also available
to the public from commercial document-retrieval services and at
the website maintained by the SEC at http://www.sec.gov.
Interests of Certain Persons
in the Offer and the Merger
Peet’s will be, and certain other persons may be, soliciting
Diedrich stockholders to tender their shares into the exchange
offer. The directors and executive officers of Peet’s and the
directors and executive officers of Diedrich may be deemed to be
participants in Peet’s solicitation of Diedrich’s stockholders to
tender their shares into the exchange offer.
Stockholders may obtain more detailed information regarding the
names, affiliations and interests of the directors and officers of
Peet’s and Diedrich in the exchange offer by reading the
prospectus/offer to purchase and certain other offer documents, as
well as the solicitation/recommendation statement.
About Peet’s Coffee & Tea,
Inc.
Peet’s Coffee & Tea, Inc., (NASDAQ: PEET), is the premier
specialty coffee and tea company in the United States. Founded in
1966 in Berkeley, California by Alfred Peet, an early tea authority
who became widely recognized as the grandfather of specialty coffee
in the U.S., Peet’s offers superior quality coffees and teas in
multiple forms, by sourcing the best quality coffee beans and tea
leaves in the world, adhering to strict high quality and taste
standards, and controlling product quality though its unique direct
store delivery selling and merchandising system. Peet’s is
committed to strategically growing its business through many
channels while maintaining the extraordinary quality of its coffees
and teas. For more information about Peet’s Coffee & Tea, Inc.
visit www.peets.com.
Forward Looking
Statements
This press release contains statements that are not based on
historical fact and are "forward-looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995.
These forward-looking statements include statements relating to the
anticipated purchase price, sources of financing for the cash
portion of the purchase price, future earnings per share, earnings
dilution and accretion expected to result from the acquisition and
the anticipated closing timing of the transaction. Forward-looking
statements are based on management’s beliefs, as well as
assumptions made by and information currently available to
management, including financial and operational information, the
company’s stock price volatility, and current competitive
conditions. As a result, these statements are subject to various
risks and uncertainties. The company’s actual results could differ
materially from those set forth in forward-looking statements
depending on a variety of factors including, but not limited to,
actions taken by competing bidders for Diedrich, fluctuations in
the market price of Peet’s common stock, legal and regulatory
developments, general economic conditions, including the current
recession and its ongoing negative impact on consumer spending, the
company’s ability to implement its business strategy, attract and
retain customers, and obtain and expand its market presence in new
geographic regions; the availability and cost of high quality
Arabica coffee beans; consumers’ tastes and preferences; complaints
or claims by current, former or prospective employees or government
agencies; and competition in its market as well as other risk
factors as described more fully in the company’s filings with the
Securities and Exchange Commission, including its Annual Report on
Form 10-K for the year ended December 28, 2008. These factors may
not be exhaustive. The company operates in a continually changing
business environment, and new risks emerge from time to time. Any
forward-looking statements speak only as of the date of this press
release.
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