Diedrich Coffee to consider Green Mountain offer, revised Peet's bid

By Lisa Kerner

Charlotte, N.C., Nov. 23 - Diedrich Coffee, Inc. said the acquisition proposal it received from Green Mountain Coffee Roasters, Inc. is superior as defined in Diedrich's merger agreement with Peet's Coffee & Tea, Inc.

Green Mountain is offering $30.00 in cash per share for Diedrich in a deal valued at approximately $247 million, a Diedrich news release said.

According to a Green Mountain news release, the company plans to fully finance the transaction using cash on hand and its existing bank lines of credit.

"We believe our offer provides Diedrich shareholders with a substantial all-cash premium as well as greater value and greater certainty than the cash and stock proposal from Peet's," Green Mountain president and chief executive officer Lawrence J. Blanford said in the release.

"We remain committed to this strategic combination."

Peet's increases offer

In response to Green Mountain's offer, Peet's upped its bid for Diedrich to $19.80 in cash plus 0.321 of a share of Peet's common stock for each Diedrich share. The offer is valued at $32.00 per share based on Peet's closing stock price on Friday.

Peet's originally offered to buy Diedrich on Nov. 2 for $26.00 per share in cash and stock.

"With our enhanced proposal, we continue to believe that this acquisition would create significant value for our shareholders," Peet's president and CEO Patrick O'Dea said in a company release.

After considering the form of payment in both proposals, Diedrich said its board will "promptly" announce whether the offer from Green Mountain continues to be superior now that Peet's has revised its offer.

Bank of America Merrill Lynch is advising Green Mountain, a Waterbury, Vt.-based specialty coffee company.

Peet's, an Emeryville, Calif., specialty coffee and tea company, is being advised by Morgan Stanley and Jesse Capital Management.

Based in Irvine, Calif., Diedrich is a specialty coffee roaster, wholesaler and retailer. The company is being advised by Houlihan, Lokey, Howard & Zukin Capital, Inc.

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