Green Mountain Coffee Roasters Inc. agreed to buy Diedrich Coffee Inc. for about $290 million in cash, trumping a competing offer by Peet’s Coffee & Tea Inc. for the maker of single-serving coffee packets.
Green Mountain, based in Waterbury, Vt., is offering Diedrich investors $35 a share, Diedrich said in a statement today. Chairman Paul Heeschen and executives owning more than 32% of Irvinea-based Diedrich’s stock support Green Mountain’s offer.
The accord is set to end a bidding contest between Green Mountain and Peet’s to secure the company’s profitable K- Cup business. Diedrich makes the individual servings of coffee and tea used in Green Mountain’s Keurig coffee makers. Green Mountain had already forced Peet’s to up an initial $213 million bid and Diedrich’s Heeschen said today the current bid “maximizes value.”
“This combination further advances our objective of becoming a leader in the highly fragmented and competitive coffee and coffee-maker businesses,” Green Mountain Chief Executive Lawrence Blanford said in a separate statement.
Green Mountain, on behalf of Diedrich, will pay an $8.5 million fee to terminate Peet’s earlier agreement, according to the statement. The Emeryville, Calif.-based company still intends to pursue its $26 cash-and-stock bid, it said Monday.
Green Mountain on Monday fell 1.3% to $60.39, while Diedrich slid 0.6% to $35.15. Peet’s fell 2.7% to $30.99.