To ensure that it is way ahead of its competition, essentially Peet's Coffee & Tea Inc., in acquisition of Diedrich Coffee Inc., the maker of single- serves coffee packets, Green Mountain Coffee Roasters Inc. has, for the second time since the bidding started, raised its offer to a new high of $290 Million.
As confirmed by the company today, Green Mountain put in a new proposal, under which each share would be valued at $35, cash, which is a substantial rise from the earlier two bids of $30 and $32. Also, the new offer is now way above Peet's, which offered to buy Diedrich on November 02 and pegged the price of each share at $26 initially, and yesterday raised it to $32.50 a share.
Both the companies are racing to get their hands on Diedrich's K-Cup business, which is the manufacturer of prepackaged coffee cups, used extensively in Green Mountain's Keurig brewing equipment. According to experts, the K-Cup manufacturing business is nearly two times as profitable as collecting royalty fees.
The acquisition, which is very important for Green Mountain's future profits, is being advised by Bank of America Merrill Lynch and law firm Ropes & Gray LLP. Peet's financial advisors are Morgan Stanley and Jesse Capital Management and Cooley Godward Kronish LLP, while Diedrich has employed the services of Houlihan, Lokey, Howard & Zukin Capital Inc. and law firm Gibson Dunn & Crutcher LLP.
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