Green Mountain Coffee Roasters, Inc. Responds to Diedrich Coffee's Determination That Green Mountain's Offer Constitutes a Superior Proposal
Green Mountain Coffee Roasters, Inc. (NASDAQ: GMCR) today issued the following statement regarding the determination by the Board of Directors of Diedrich Coffee, Inc. (NASDAQ: DDRX) ('Diedrich') that GMCR's revised $32.00 per share all-cash proposal constitutes a superior proposal, as defined in the existing merger agreement between Diedrich and Peet's Coffee & Tea, Inc. (NASDAQ: PEET), to Peet's November 22, 2009 cash and stock proposal:
We are extremely pleased that Diedrich's Board of Directors has determined that our revised $32.00 per share offer constitutes a superior proposal to Peet's November 22, 2009 cash and stock proposal. Our all-cash offer provides Diedrich shareholders with a substantial premium as well as greater value and greater certainty and speed of closing over Peet's last proposal. We remain firmly committed to this strategic combination and look forward to moving quickly in partnership with Diedrich to complete this transaction.
GMCR's proposal has a total transaction value of approximately $265 million and represents an approximately 57% premium to the closing market price of Diedrich common stock on November 2, 2009, the last trading day prior to the public announcement of the merger agreement between Diedrich and Peet's. Additionally, this $32.00 all-cash offer represents a significant premium, based on the price of Peet's stock, and greater certainty than Peet's November 22, 2009 proposal, which is subject to fluctuations of market price.
Under the terms of GMCR's revised proposal, GMCR will acquire all of the outstanding shares of Diedrich common stock for $32.00 per share in cash pursuant to a cash tender offer, with no financing and no due diligence contingencies. GMCR intends to fully finance this transaction through cash on hand and GMCR's existing bank lines of credit. At the request of Diedrich's Board, GMCR's offer includes a commitment to pay a 'reverse break-up fee' of $8.5 million that would be payable to Diedrich if the GMCR merger agreement were to be terminated under certain circumstances. GMCR noted that it has thoroughly evaluated the relevant regulatory process and is confident it can consummate the transaction promptly in early 2010. GMCR anticipates that this transaction will be neutral to slightly accretive within the first twelve months following the close, excluding one-time transaction expenses, and accretive thereafter.
BofA Merrill Lynch is serving as financial advisor to GMCR on this transaction and Ropes & Gray LLP is serving as its legal advisor.
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