Peet’s Coffee & Tea (NASDAQ:PEET) has agreed to be taken private by investment group Joh. A. Benckiser for about $1 billion in a move that could help Peet’s better compete with larger rivals Starbucks (NASDAQ:SBUX) and Dunkin Brands (NASDAQ:DNKN).
The deal calls for Benckiser, the investment vehicle of Germany’s Reimann family, to pay $73.50 a share, representing a premium of 29% over Peet’s closing price on Friday. Following the deal’s consummation, Peet’s will be operated by the current management team and employees.
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Peet’s board of directors unanimously approved of the deal. Shares of the Emeryville, Calif.-based company are trading up more than 29% to $73.83 Monday morning.
“At JAB, we are committed to owning and investing in companies with strong, premier-quality brands and great people whose values we share,” Benckiser CEO Bart Becht said in a statement. “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 transaction is considered a one-step merger with Peet’s as the surviving company. It is expected to close in about three months, pending customary cloding conditions, including shareholder and regulatory approvals.
Citigroup (NYSE:C) is serving as Peet’s financial advisor.
Because of the plans to go private, Peet’s said it will not hold a conference call to discuss second-quarter results as originally scheduled in early August. In May, the coffee maker reported a 38% drop in earnings, citing high coffee bean prices that offset stronger sales.
As of the end of the first quarter, Peet’s had been backing its fiscal 2012 profit and sales view.