(By Balaseshan) Peet's Coffee & Tea Inc. (NASDAQ:PEET) shares jumped more than 28% after the specialty coffee roaster has agreed to be bought by privately-held investment group Joh. A. Benckiser for about $1 billion.
The acquisition price of $73.50 per share in cash represents a premium of about 29% over Peet's Friday closing stock price of $57.16. The agreement has been unanimously approved by the Peet's board of directors.
At the close of the transaction, Peet's will be privately owned and will continue to be operated by the company's current management team and employees.
The transaction requires the affirmative vote of holders of a majority of Peet's outstanding shares, which will be sought at a special meeting of shareholders.
The transaction, which is structured as a one-step merger with Peet's as the surviving corporation, is not subject to a financing condition and is expected to close in about three months, subject to customary closing conditions, including receipt of shareholder and regulatory approvals.
The portfolio held by Joh. A. Benckiser, the investment vehicle for the Reimann family of Germany, includes a majority stake in Coty Inc., a minority stake in Reckitt Benckiser Group PLC, and a minority investment in D.E Master Blenders 1753.
Peet's Coffee & Tea, founded in Berkeley, CA in 1966 by Alfred Peet, will remain based in the San Francisco Bay Area, with its home office in Emeryville and its LEED (Leadership in Energy and Environmental Design) Gold Certified roast-to-order facility in Alameda.
In addition to Joh. A. Benckiser, BDT Capital, a Chicago-based merchant bank that provides long-term private capital and advice to closely held companies, is participating in this transaction as an advisor and minority investor.
Citigroup is serving as exclusive financial advisor to Peet's in connection with this transaction and has delivered a fairness opinion to the Board of Directors of Peet's. Cooley LLP is acting as Peet's legal advisor.
For Joh. A. Benckiser, Skadden, Arps, Slate, Meagher & Flom LLP is acting as legal advisor. Morgan Stanley & Co. LLC and BDT & Co. are serving as financial advisors.
PEET is trading 29.36% higher at $73.94 on Monday. The stock has been trading between $51.16 and $77.60 for the past 52 weeks.