Pat O'Dea, chief executive of Peet's Coffee & Tea, toasts… (John Storey / PR Newswire )
Peet’s Coffee & Tea Inc., the Bay Area-based cafe chain, is going private for $977.6 million – but it’s not being sold to Starbucks, its giant Seattle rival.
Instead, German conglomerate Joh. A. Benckiser will shell out $73.50 a share to buy the Emeryville company, paying a 29% premium on Friday’s $57.16 closing price. Peet’s had just under 200 stores as of this spring.
Last spring, Peet’s and Starbucks were rumored to be in talks to combine in an effort to boost both brands’ presence in grocery stores. Peet's founder Alfred Peet knew the Starbucks founders and sold them coffee beans when they launched their business a few years after Peet's first opened.
But now, Peet’s will go to a company better known for its holdings in beauty and luxury.
Benckiser owns a majority stake in Coty Inc., the maker of OPI nail polish and celebrity perfumes. Coty recently abandoned its attempts to buy beauty company Avon Products Inc. for $10.7 billion and said it instead plans to raise $700 million in an initial public offering.
Benckiser also owns Labelux, a luxury goods company with brands such as Jimmy Choo and Bally. The deal with Peet’s, which was unanimously approved by the coffee-maker’s board, is expected to close in about three months.
Peet’s was founded in 1966 in Berkeley, close to the UC campus, and has an eco-friendly roasting facility in Alameda. Operations will stay based a few minutes away in Emeryville; the current management team and employees will continue to run the company.
In 2009, Peet’s lost a bidding war to buy Irvine coffee roaster Diedrich Coffee Inc. Green Mountain Coffee Roasters Inc. ended up picking up the company for $290 million.
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