Peet’s Coffee & Tea, Inc. (NASDAQ: PEET) announced today
that it reinstated and enhanced its previously expired proposal to
acquire Diedrich Coffee, Inc. (NASDAQ: DDRX) for stock and cash
valued at $32.50 based on Peet’s current stock price. Under its
enhanced proposal, the stock component remains at 0.321 of a share
of Peet’s common stock, and the cash component will be an amount
between $21.26 and $22.87 such that the value of the total
consideration paid per Diedrich share equals $32.50 for all Peet’s
common stock prices between $30.00 and $35.00. If Peet’s
volume-weighted average stock price over a designated period prior
to the completion of the exchange offer is $35.00 or higher, the
value of the offer would increase above $32.50 per share, and if
Peet’s average stock price over that period is $30.00 or lower, the
value of the offer would decrease below $32.50. Peet’s stock closed
today at $32.56 on the Nasdaq Global Select Market.
When Peet’s originally presented its November 22, 2009 proposal,
Peet’s stock price was $38.00, which valued the proposal at $32.00
per Diedrich share. By November 24, 2009, following the
announcement of a competing bid for Diedrich by Green Mountain
Coffee Roasters, Inc. (NASDAQ: GMCR), Peet’s proposal was valued at
$30.35 per Diedrich share based on the $32.86 closing price of
Peet’s common stock on November 24, 2009.
Peet’s presented the details of its modified proposal in a
November 30, 2009 letter to the Diedrich board of directors. Peet’s
also reiterated its intention and capability to close the
transaction before year-end 2009, while GMCR referred in its
November 25, 2009 press release to a closing of its proposed
transaction in early 2010. In addition, GMCR’s proposed definitive
agreement with Diedrich allows it to extend the latest date by
which the transaction must be completed to June 29, 2010 in the
event of failure to obtain Hart-Scott-Rodino antitrust clearance.
Peet’s accelerated the corresponding date in its enhanced proposal
from March 31, 2010 to February 15, 2010, with no extension for
Hart-Scott-Rodino clearance. Peet’s views these timing differences
to be a material factor in making Peet’s proposal superior to
GMCR’s.
Under Peet’s enhanced proposal, as with its previous proposal,
outstanding warrants and options to acquire Diedrich common stock
will also be converted into the right to receive a combination of
cash and shares of Peet’s common stock.
"In light of the antitrust challenges that Diedrich and GMCR
acknowledge in their proposed agreement, along with the higher
price, upside potential and greater protection against downside
risk in our proposal, we strongly believe this new proposal to be
clearly superior to the GMCR offer," said Patrick O’Dea, President
and CEO of Peet’s.
Peet’s board of directors is being advised on antitrust matters
by Kevin Arquit of Simpson Thacher & Bartlett LLP. Mr. Arquit
is widely recognized as a leading antitrust authority. Prior to
joining Simpson Thacher, Mr. Arquit was Director of the Bureau of
Competition at the U.S. Federal Trade Commission.
“We continue to believe that our acquisition of Diedrich would
create significant value for the stockholders of both companies,”
said Mr. O’Dea. “We also remain convinced that Peet’s participation
in the single serve K-Cup market would bring much-needed
competition to that market that would benefit both consumers and
retail trade customers while also accelerating household
penetration of the Keurig brewer system,” added O’Dea.
Assuming Peet’s enhanced proposal is accepted, Peet’s expects
the acquisition to be dilutive to earnings in 2010 and accretive
thereafter. Peet’s expects fully-diluted earnings per share to be
in the range of $0.70 to $0.80 in 2010 and $2.00 to $2.10 in 2011.
Peet’s plans to finance the cash portion of the acquisition through
a combination of cash on hand (at both companies) and $175 million
of committed debt financing from Rabobank Nederland.
Cooley Godward Kronish LLP is acting as Peet’s legal advisor;
Simpson Thacher & Bartlett LLP is acting as legal advisor on
antitrust matters. 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 website 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 from 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 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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