This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
$1 buys you full access to ALL of TheStreet's Subscription Services! Learn More

Shareholder Rights Law Firm Johnson & Weaver, LLP Announces Investigation Of Fairness Of Peet's Coffee & Tea, Inc. Going Private Transaction

Stocks in this article: PEET

Shareholder Rights Law Firm Johnson & Weaver, LLP is investigating whether members of the board of directors of Peet's Coffee & Tea, Inc. ( PEET) breached their fiduciary duties and violated other laws in connection with their efforts to sell the company to a German financial conglomerate.

On July 23, 2012, Peet’s announced that it will be acquired by Joh. A. Benckiser, the investment vehicle for Germany’s Reimann family, for $73.50 per share. Peet’s also emphasized that the agreement was “unanimously approved by the Peet's Board of Directors” and represents a premium of approximately 29% over Peet's closing stock price on July 20, 2012. “This announcement uses fuzzy math,” said Frank Johnson of Johnson & Weaver, LLP. Johnson added that “before a recent downturn, the stock traded at or above $70 for much of 2012, closing as high as $76.82 less than three months ago.” In addition, several analysts have set target prices for Peet's between $80 and $95 per share based on recent growth and positive results. Thus, while the Benckiser offer price may seem attractive when compared to a closing price just days before, an analysis of Peet’s long-term performance raises questions as to whether this deal is an attempt to buy a solidly profitable company on the cheap during a temporary period of decline.

According to Mitchell Pinheiro of Janney Capital Markets, “We thought Peet’s would make more sense for a larger packaged food company that would have more marketing muscle, distribution power, and cost synergies, as opposed to being part of a private equity portfolio.” In other words, had Peet’s Board of Directors elected to merge the Company with another strong, logically synergistic publicly traded company, Peet’s shareholders could have maintained their equity interest and realized the “growth potential” from such a merger. Instead, Peet’s Board agreed to a “going-private” deal that cashes out shareholders at a discount with no opportunity to reap the benefits of any future growth. Interestingly, Peet’s Board required as a condition of the going-private deal that “[t]he current management and employees will remain with the company, and its headquarters will stay in Emeryville, CA.” Peet’s Coffee Acquired in Billion-Dollar Deal, MSNBC Marketday, July 23, 2012.

1 of 2

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,810.06 +91.06 0.51%
S&P 500 2,063.50 +10.75 0.52%
NASDAQ 4,712.97 +11.1030 0.24%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs