Coffee Consolidation: Diedrich Sells Out to Peet’s

A few weeks ago I wrote about the perils of shorting Diedrich Coffee (Nasdaq:DDRX) going into the strong holiday season. One thing I hadn’t considered: a potential buyout.

After the bell Monday, DDRX shares were halted while the company announced that Peet’s Coffee (Nasdaq:PEET) would buy Diedrich in a cash and stock deal valued at $213 million. Peet’s will pay a combination of $17.33 in cash and stock worth approximately $8.67 for each DDRX share.

“Together, Diedrich and Peet’s will create new growth opportunities for Diedrich’s brands and further drive household penetration of the K-Cup market,” said Diedrich chairman Paul Heeschen. “As a result, this combination benefits shareholders of both companies, customers, employees and our K-Cup business partners. Our already strong K-Cup business will accelerate under Peet’s in a way we could not achieve alone,” said Heeschen.

DISCLOSURE: No position.

Comments

[John Rayhall:]

Awesome call great job! So glad I didn't short. Thank You.

Nov 03 01:01 PM