Emeryville-based Peet’s Coffee & Tea Inc., which came up short in a bidding war for Irvine-based coffee seller Diedrich Coffee Inc., isn’t bowing out entirely.
Peet’s said Monday its offer to acquire Diedrich for $265 million in cash and stock still stands and has been extended through February.
Diedrich is in the process of being acquired for $290 million in cash by Vermont-based Green Mountain Coffee Roasters Inc., which in December prevailed over Peet’s in a bidding war.
Peet’s is keeping its offer alive in case Green Mountain’s buyout runs into regulatory issues, according to a Reuters report.
Last month, 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 Jan. 27 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.
Green Mountain said it expects to “close the transaction promptly” once regulators are done reviewing the Diedrich buy.
