Peet’s Coffee & Tea Inc., which was founded in Berkeley in 1966 by Alfred Peet, is being taken private by German investment group Joh. A Benckiser for $977.6 million. Although the original Peet’s store is still operational on the corner of Vine and Walnut, the company headquarters has long been in Emeryville and the roasting facility is in Alameda.
The current management of Peet’s will continue to run the company and the Emeryville HQ and Alameda roasting facility will not be shifted. The acquisition was unanimously approved by Peet’s board of directors and is expected to close in three months. A majority of the company’s outstanding shares must be voted in favor of the deal at a special shareholders’ meeting.
Peet’s has been a public company since January, 2001. Its shares have strongly outperformed the market over the last ten years, but have been down in recent months. Although Peet’s has grown to nearly 200 stores in six states, and sells its products through numerous retailers, including Safeway, Whole Foods, Target and Walmart, it is dwarfed in its sector by Seattle-based Starbucks.
As Peet’s aficionados often relate, when Starbucks was founded in 1971 — five years after Peet’s — it bought its beans directly from Peet’s. The two companies were further entwined when Jerry Baldwin, a Starbucks founder, in 1984 bought Peet’s four Bay Area stores from Sal Bonavita, who had bought the company from Alfred Peet in 1979. In 1987, Baldwin and and his co-investors sold Starbucks to focus on Peet’s. In March last year, there was speculation in the financial media that Starbucks was in takeover talks with Peet’s.
Benckiser, the family holding group that will acquire Peet’s, has three main divisions: Reckitt Benckiser, an England-based consumer products company whose brands include Air Wick, Clearasil, and Durex; Coty, a France-based fragrances and cosmetics company; and Labelux, a Swiss-based company that manages luxury brands, including Bally and Jimmy Choo.
After today’s announcement of Benckiser’s acquisition of Peet’s, a number of law firms have announced investigations on whether Peet’s board of directors violated its fiduciary responsibilities to shareholders. Although the purchase price of $73.50 per share in cash is a nearly 30% premium on Friday’s closing price, some sector analysts have suggested Peet’s is worth up to $95 a share. Such investigations and, frequently, resulting lawsuits, are common in takeover deals.
The nearly $1 billion sale price of Peet’s is one of the largest prices paid for a Berkeley-founded company. Ask.com, which was founded in Berkeley in 1996, was acquired by InterActiveCorp in 2005 for $1.85 billion.
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No more morning capuccinos with pooch on Peet’s patio (09.23.11)
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