Shareholders of Peet’s Coffee & Tea, Inc. (NASDAQ:PEET) received a bonanza, when the company agreed to a $1 billion takeover offer from German investing group Joh. A. Benckiser, which will take Peet’s private in about three months, according to the WSJ. The transaction has been structured as a one-step merger, and Peets’ will not hold a conference call to discuss its second quarter fiscal 2012 results.
Shares in the speciality coffee retailer waltzed 29 percent on the news to $73.85, even higher than the $73.50 offer from Joh. A. Benckiser. The shares of the company have been sagging in recent months due to high coffee prices and tough competition, not the least of which is the rising popularity of single-serve coffees.
Senior executives extolled the virtues of the deal in Peet’s press release. “We are very excited about this next chapter in Peet’s rich history,” said Patrick O’Dea, President and CEO of Peet’s. “Over many years we’ve demonstrated an unyielding commitment to craft coffees and teas of uncompromised quality. This commitment is what has distinguished the Peet’s brand among all others, and will continue to guide us as we go forward.” Jean-Michel Valette, Chairman of the Board of Peet’s, added, “In my experience it is rare to find a company and a brand as special as Peet’s. We are pleased that JAB recognizes this and that Peet’s existing shareholders will be rewarded with significant value.” “At JAB, we are committed to owning and investing in companies with strong, premier-quality brands and great people, whose values we share,” said Bart Becht, Chairman of JAB. “Peet’s is just such a company and we look forward to preserving the company’s culture and core values, while supporting management’s vision for future growth.”
The acquirer, Joh A. Benckiser, is owned by Germany’s wealthy Reimann family, and is their vehicle for long term investment in consumer-goods companies. Other investments include perfumer, Coty Inc., and Reckitt Benckiser Group PLC. The group also has a minority investment in D.E. Master Blenders 1753, a company listed in Amsterdam and owning the Douwe Egberts coffee business that was spun out of Sara Lee.
Peet’s was advised by Citigroup Inc. (NYSE:C), while Morgan Stanley (NYSE:MS) and Chicago-based BDT & Co advised Joh. A. Benckiser. BDT is also participating in the deal as a minority investor.