Peet’s to Be Bought by Joh. A. Benckiser for $1 Billion
Peet’s Coffee & Tea, Inc. (PEET) agreed to be acquired by Joh. A. Benckiser for about $1 billion, giving the closely held company about 190 specialty cafes in the U.S. and access to an expanding grocery business.
The offer of $73.50 per share is 29 percent more than Peet’s closing price of $57.16 on July 20, Emeryville, California-based Peet’s said today in a statement. The transaction is expected to be completed in about three months, the companies said.
While Peet’s profit has been hurt recently by surging coffee prices and increased competition, sales in its grocery business have increased. The company began selling Godiva brand coffees in grocery and drug stores in 2009 to establish a bigger retail presence, especially in flavored coffees.
Peet’s surged 29 percent to $73.68 at 10:09 a.m. in New York, indicating shareholders may expect a higher offer. The shares, which reached $77.60 in March, had dropped 8.8 percent this year through July 20.
Peet’s was founded by Alfred Peet in Berkeley, California, in 1966, five years before Starbucks Corp. (SBUX) was started in Seattle in 1971. Peet mentored Starbucks’ co-founder Gerald Baldwin, who later bought Peet’s and sold the Starbucks chain. Baldwin was Peet’s chief executive officer for about 23 years and serves as a board member.
Citigroup Inc. acted as the exclusive financial adviser to Peet’s and provided a fairness opinion to the board, while Cooley LLP served as legal adviser. Skadden Arps Slate Meagher & Flom LLP provided legal counsel to JAB on this transaction, while Morgan Stanley and BDT & Company served as financial advisers.
To contact the reporter on this story: Leslie Patton in Chicago at firstname.lastname@example.org
To contact the editor responsible for this story: Robin Ajello at email@example.com