Green Mountain Coffee Roasters, Inc. Confirms $35.00 Per Share Enhanced Cash Proposal to Acquire Diedrich Coffee, Inc.
December 02 2009 - 1:35AM
Business Wire
Green Mountain Coffee Roasters, Inc. (NASDAQ: GMCR) (“GMCR”)
announced that yesterday it submitted an enhanced proposal to
acquire Diedrich Coffee, Inc. (NASDAQ: DDRX) (“Diedrich”) for
$35.00 per share in cash pursuant to a cash tender offer, in a
transaction with a total value of approximately $290 million. 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, Inc. (NASDAQ: PEET), 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.
GMCR’s 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. GMCR believes that Diedrich shareholders will also recognize
that a transaction with Peet’s would result in a highly leveraged
company.
Lawrence J. Blanford, President and Chief Executive Officer of
GMCR, said, “We were pleased to learn that Diedrich’s Board of
Directors has determined that our $35.00 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.
“This is a compelling transaction for GMCR shareholders as it
adds three leading and complementary coffee brands to our own
portfolio, as well as strategically located manufacturing and
distribution facilities. We are eager to start realizing the
benefits of this transaction for our shareholders as quickly as
possible, and therefore after careful deliberation, we determined
to enhance our proposal to $35.00 per Diedrich share,” added
Blanford.
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. In that regard,
GMCR’s offer includes a graduated reverse break-up fee structure
such that the reverse break-up fee starts at $8,517,000 for a
termination on or prior to February 15, 2010 and increases by
$1,000,000 in each subsequent 60 day period, in each case payable
by GMCR to Diedrich in the unlikely event that regulatory approvals
are not obtained under the terms and conditions of the merger
agreement.
BofA Merrill Lynch is serving as financial advisor to GMCR on
this transaction and Ropes & Gray LLP is serving as its legal
advisor.
About Green Mountain Coffee Roasters, Inc. (NASDAQ:
GMCR)
As a leader in the specialty coffee industry, Green Mountain
Coffee Roasters, Inc. is recognized for its award-winning coffees,
innovative brewing technology, and socially responsible business
practices. GMCR’s operations are managed through two business
units. The Specialty Coffee business unit produces coffee, tea and
hot cocoa from its family of brands, including Tully’s Coffee®,
Green Mountain Coffee®, Newman’s Own® Organics coffee and Timothy’s
World Coffee®. The Keurig business unit is a pioneer and leading
manufacturer of gourmet single-cup brewing systems. K-Cup® portion
packs for Keurig® Single-Cup Brewers are produced by a variety of
licensed roasters, including Green Mountain Coffee, Tully’s Coffee
and Timothy’s. GMCR supports local and global communities by
offsetting 100% of its direct greenhouse gas emissions, investing
in Fair Trade Certified™ coffee, and donating at least five percent
of its pre-tax profits to social and environmental projects. Visit
www.gmcr.com for more information.
Forward-looking statements
Certain statements contained herein, including GMCR’s intention
to complete the proposed acquisition, are not based on historical
fact and are “forward-looking statements” within the meaning of the
applicable securities laws and regulations. Generally, these
statements can be identified by the use of words such as
“anticipate,” “believe,”, “could,” “estimate,” “expect,” “feel,”
“forecast,” “intend,” “may,” “plan,” “potential,” “project,”
“should,” “would,” “and similar expressions intended to identify
forward-looking statements, although not all forward-looking
statements contain these identifying words. Owing to the
uncertainties inherent in forward-looking statements, actual events
or results could differ materially from those stated herein.
Factors that could cause actual results to differ materially from
those in the forward-looking statements include, but are not
limited to, the impact on sales and profitability of consumer
sentiment in this difficult economic environment, GMCR’s success in
efficiently expanding operations and capacity to meet growth,
GMCR’s success in efficiently and effectively integrating Tully’s
and Timothy’s wholesale operations and capacity into its Specialty
Coffee business unit, GMCR’s success in introducing new product
offerings, the ability of lenders to honor their commitments under
GMCR’s credit facility, competition and other business conditions
in the coffee industry and food industry in general, fluctuations
in availability and cost of high-quality green coffee, any other
increases in costs including fuel, Keurig’s ability to continue to
grow and build profits with its roaster partners in the At Home and
Away from Home businesses, the impact of the loss of major
customers for GMCR or reduction in the volume of purchases by major
customers, delays in the timing of adding new locations with
existing customers, GMCR’s level of success in continuing to
attract new customers, sales mix variances, weather and special or
unusual events, as well as other risks described more fully in
GMCR’s filings with the U.S. Securities and Exchange Commission
(the "SEC"). Forward-looking statements reflect management’s
expectations as of the date of this press release, and are subject
to certain risks and uncertainties. GMCR does not undertake to
revise these statements to reflect subsequent developments, other
than in its regular, quarterly earnings releases.
Additional Information
The tender offer to purchase shares of Diedrich common stock
referenced in this press release has not yet commenced, and this
press release is neither an offer to purchase, nor a solicitation
of an offer to sell, any securities. The tender offer to purchase
shares of Diedrich common stock will be made only pursuant to a
Tender Offer Statement on Schedule TO containing an offer to
purchase, forms of letters of transmittal and other documents
relating to the tender offer (the "Tender Offer Statement"), which
GMCR will file with the SEC and mail to Diedrich stockholders.
Security holders of Diedrich are advised to read the Tender Offer
Statement when it becomes available, because it will contain
important information about the tender offer. Investors and
security holders of Diedrich also are advised that they may obtain
free copies of the Tender Offer Statement and other documents filed
by GMCR with the SEC (when these documents become available) on the
SEC's website at http://www.sec.gov. In addition, free copies of
the Tender Offer Statement and related materials may be obtained
(when these documents become available) from GMCR by written
request to: Green Mountain Coffee Roasters, Inc., Attention:
General Counsel, 33 Coffee Lane, Waterbury, Vermont 05676.
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