Peet’s Coffee & Tea agrees to $1B buyout

By
It would be $73.50 per share

Peet’s Coffee & Tea Inc. said Monday it has entered into a definitive agreement to be acquired by European holding company Joh. A. Benckiser (JAB) for $73.50 per share, or about $1 billion.

The deal, which would take Peet’s private, was unanimously approved by its board of directors, the company said. The Berkeley, Calif.-based company also stated that Peet’s will continue to be operated by its current management team and employees.

"We are very excited about this next chapter in Peet's rich history," Patrick O'Dea, president and chief executive of Peet's, said in a statement. "Over many years we've demonstrated an unyielding commitment to craft coffees and teas of uncompromised quality. This commitment is what has distinguished the Peet's brand among all others and will continue to guide us as we go forward."

The deal price represents a premium of about 29 percent over Peet’s closing stock price on July 20, which totaled $57.16. One analyst said Monday he believed shareholders may object to the price. Peet’s has traded as high as $77.60 per share during its last year.

“We would not be surprised if shareholders object to the price or if competing bids emerge, given the company’s strong 2012-2014 growth prospects and unique brand positioning with the … packaged coffee business,” David Tarantino, securities analyst at Baird Equity Research, said in a report Monday.

In addition to JAB, which is a privately held group focused on investments in premium brands in the consumer goods category, BDT Capital, a Chicago-based merchant bank, is participating in the transaction as an advisor and minority investor.

"At JAB, we are committed to owning and investing in companies with strong, premier-quality brands and great people whose values we share," Bart Becht, chairman of JAB, said in a statement. "Peet's is just such a company and we look forward to preserving the company's culture and core values, while supporting management's vision for future growth."

Peet’s Coffee & Tea was founded in 1966 and operates 196 locations in the United States.

Contact Charlie Duerr at charles.duerr@penton.com.