Diedrich Coffee finds latest Green Mountain offer superior to Peet's

By Lisa Kerner

Charlotte, N.C., Dec. 2 - Diedrich Coffee, Inc.'s board of directors determined that Green Mountain Coffee Roasters, Inc.'s revised offer is a superior proposal to Diedrich's amended merger agreement with Peet's Coffee & Tea, Inc., it was announced on Wednesday.

Green Mountain enhanced its offer for Diedrich's outstanding shares of common stock earlier in the day to $35.00 per share in cash, or a total value of approximately $290 million, according to a Diedrich news release.

Diedrich said Green Mountain proposed a form of merger agreement that is "more favorable to Diedrich Coffee's stockholders" than its current merger agreement with Peet's.

The revised Green Mountain offer reduces the limitations and restrictions on Diedrich's ability to operate its business prior to the completion of the transaction, the release said.

Also, the revised offer includes a graduated reverse termination fee of between $8.52 million and $11.52 million payable to Diedrich.

Green Mountain said there are no financing or due diligence contingencies to its proposal and the company will fund the transaction using cash on hand and existing bank lines of credit.

"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," Green Mountain president and chief executive officer Lawrence J. Blanford said in a company statement.

On Tuesday, Peet's revised its stock-and-cash offer for Diedrich to $32.50 per share, consisting of 0.321 of a share of Peet's common stock and $21.265 to $22.870 in cash.

Peet's can negotiate its merger agreement with Diedrich until 5 p.m. ET on Monday, according to Diedrich.

Previously, Peet's had offered 0.321 of a share of its common stock plus $19.80 in cash for each Diedrich share.

Peet's submitted a revised offer on Monday after Green Mountain's proposal was determined to be superior by Diedrich's board of directors last week.

As previously reported, Green Mountain upped its original offer for Diedrich by $2.00 per share to $32.00 per share in cash after Peet's raised its offer to $19.80 in cash plus 0.321 of a Peet's for each Diedrich share.

The original Green Mountain offer was also deemed to be superior to Peet's original offer of $26.00 per share in cash and stock.

Based in Irvine, Calif., Diedrich is a specialty coffee roaster, wholesaler and retailer.

Green Mountain is a Waterbury, Vt.-based specialty coffee company.

Peet's is an Emeryville, Calif., specialty coffee and tea company.

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