Diedrich Coffee Inc. of Irvine said Green Mountain Coffee Roasters Inc.'s $265-million all-cash takeover offer was superior to a stock-and-cash bid from Peet's Coffee & Tea Inc.
Peet's proposal to buy Diedrich reverted to the Nov. 2 offer of $26 a share, or about $213 million, after an improved bid of $30.35 a share, or about $251 million, expired Wednesday.
Green Mountain, of Waterbury, Vt., raised its bid to $32 a share Tuesday, from $30.
The companies are vying for Diedrich's K-Cup business, which makes single-serving coffee pods used in Green Mountain's Keurig brewing equipment.
"Diedrich is clearly saying they value the cash offer more than the stock," said Steve West, an analyst with Stifel, Nicolaus & Co. in St. Louis. He recommends buying Peet's stock.
"If Peet's wants to increase their offer, they'll have to add cash to it."