(Updates with response from Peet's, adds background and share
information)
Green Mountain Coffee Roasters, Inc. (GMCR) again raised its
offer to buy Diedrich Coffee Inc. (DDRX), this time to $290
million, after rival Peet's Coffee & Tea Inc. (PEET) increased
its bid.
In response, Peet's said it believed its offer to be superior
and that it thinks there are "significant antitrust issues"
associated with any Green Mountain proposal. Peet's said it would
take "the next few days" to consider its options.
Green Mountain, which had most recently offered to buy Diedrich
for $32 a share in cash, boosted the bid to $35. Peet's latest
offer, made Monday night, was a stock-and-cash bid worth $32.50 a
share.
Diedrich said Wednesday its board continues to view Green
Mountain's bid as the "superior proposal," not only because of its
higher price but also more favorable terms.
The new Green Mountain bid provides for a reduction in the
limitations and restrictions on Diedrich's ability to operate its
business during the period prior to the completion of the
transaction, as compared to the Peet's merger agreement, Dieidrich
said. It also said the offer increases the time Diedrich may remedy
deficiencies relating to the satisfaction of certain conditions to
the deal.
"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," said Green Mountain Chief
Executive Lawrence J. Blanford.
Peet's, which sells premium coffee and tea, is pursuing Diedrich
to try to get a foothold into the fast-growing single-serve coffee
market in the form of K-Cups, plastic pods used in Keurig coffee
machines. The machines have exploded in popularity in recent years,
as they offer a convenient way to brew a cup of coffee from a
choice of flavors. Over the last year, Keurig shipped 1.6 billion
K-Cup portion packs, up 63% from last year.
But the Keurig technology is owned by Green Mountain, which
appears to want to bring more of the brands licensed to sell K-Cups
under its wings. Green Mountain recently bought a separate coffee
brand, Timothy's Coffee of the World Inc., for $157 million.
Shares of Peet's closed at $32.78 on Tuesday while Green
Mountain and Diedrich ended at $62.04 and $33.97, respectively. All
were inactive premarket.
-By Nathan Becker, Dow Jones Newswires; 212-416-2855; nathan.becker@dowjones.com;