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Diedrich Coffee sells out to Peet’s (DDRX PEET)
Topics: microcaps, smallcapsA 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 today, 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.
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When one does closes another one opens. Tully’s has tried to do an IPO twice over the last decade, but has been derailed both times by a lousy market. A little over a year ago they pulled their last issue, but with this kind of frenzy, it wouldn’t surprise me to see them put it back on the table.
Davis,
Good point. Tully’s is a possibility, maybe even a probability if the market remains calm for the next 6 months. The real wildcard in coffee stocks may come if Dunkin’ Brands goes public. The private investors (Bain, TH Lee, etc.) surely must be considering an exit strategy.
p.s. Davis congrats on 5 solid years of blogging.