GMCR Trumps Peet's Offer for Diedrich
Green Mountain Coffee Roasters Inc. (GMCR) announces that on Dec. 1, 2009 it submitted an enhanced proposal to acquire Diedrich Coffee Inc. 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., to Peet's Nov. 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.
Lawrence J. Blanford, president and chief executive officer of GMCR, says, "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 Nov. 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."
Lawrence J. Blanford, president and chief executive officer of GMCR, says, "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 Nov. 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."
However, when Peet's Coffee & Tea originally presented its Nov. 22, 2009 proposal, Peet's stock price was $38.00, which valued the proposal at $32.00 per Diedrich share. By Nov. 24, 2009, following the announcement of a competing bid for Diedrich by 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 Nov. 24, 2009.
Peet's presented the details of its modified proposal in a Nov. 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. 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," says Patrick O'Dea, president and CEO of Peet's.