Peet's Coffee & Tea Inc. raised its bid to buy Diedrich Coffee Inc., the maker of single-serve coffee packets, for the second time to $32.50 a share, topping the latest offer from Green Mountain Coffee Roasters Inc.
Peet's boosted the cash portion of its bid to a range of $21.26 to $22.87, plus 0.321 share of its own stock, for each Diedrich share, the Emeryville, Calif.-based company said. The offer totals $32.50 a share at any price of Peet's stock from $30 to $35. Last week, Peet's offered as much as $32 a share, including $19.80 in cash, while Green Mountain raised its bid to $32 a share in cash, or $265 million.
The companies are vying for Diedrich's K-Cup business, the maker of prepackaged coffee cups used in Green Mountain's Keurig brewing equipment. Green Mountain has been consolidating K-Cup manufacturing, which is about twice as profitable as collecting royalty fees, according to Mitchell Pinheiro, an analyst with Janney Montgomery Scott in Philadelphia.
"Green Mountain could counter with an increased offer, as the company seems committed to rolling up its K-cup licensees," David Tarantino, an analyst with Robert W. Baird & Co. in Milwaukee wrote in a note.
Diedrich said in a statement today it is evaluating the revised offer from Peet's. The company determined on Nov. 25 that Green Mountain's $32-a-share cash bid was superior to Peet's prior offers, which expired yesterday.
Diedrich, based in Irvine, rose 69 cents to $33.81. Peet's added 2 cents to $32.58, and Green Mountain lost 55 cents to $62.43.