Vermont-based Green Mountain Coffee Roasters Inc. has extended its offer to buy Irvine-based coffee seller Diedrich Coffee Inc. after running into regulatory issues.
Diedrich is in the process of being acquired for $290 million in cash by Green Mountain, which in December prevailed over Emeryville-based Peet’s Coffee & Tea Inc. in a bidding war.
Green Mountain’s offer to buy Diedrich was extended to April 5. The original offer was set to expire on Monday.
Green Mountain’s buyout has run into issues with the Federal Trade Commission.
In January, regulators asked Green Mountain and Diedrich for more details about the deal.
The inquiry likely has to do with sales of a new type of single brewing cups known as K-Cups.
K-Cups allow you to brew a single cup of coffee in a special machine by putting one of the K-Cups into the slot where coffee grounds and a filter would go on other machines.
Green Mountain’s Keurig Inc. unit owns the K-Cup brand and grants licenses for others to produce them. Diedrich is one of a handful of K-Cup licensees.
Regulators could have concerns about the deal’s impact on the market for K-Cups.
Green Mountain is seeking to consolidate production and sales of K-Cups, according to Mitchell Pinheiro, an analyst with Philadelphia-based Janney Montgomery Scott LLC.
Producing and selling K-Cups is about twice as profitable as collecting royalties from licensees, Pinheiro said.
On a January conference call, Green Mountain executives said they were working to answer additional questions from the Federal Trade Commission.
They didn’t elaborate on what kind of information regulators are seeking.
Rival Peet’s has extended its offer several times for Diedrich in the hopes a rival buyout bid is derailed by regulators.
