Gourmet coffee chain Peet's Coffee & Tea Inc increased its cash-and-stock offer to acquire Diedrich Coffee Inc by $53 million to ward off competition from rival Green Mountain Coffee Roaster Inc.
The revised offer from Peet's values Diedrich at about $32 a share, a premium of 23 percent over the stock's Friday closing price. The total value of the deal is about $265 million.
On Monday, Green Mountain confirmed it had offered to buy Diedrich for $30 a share, 15 percent more than the stock's closing price on Friday, or a total of $247 million in cash.
Green Mountain said its offer had no financing and no due diligence contingencies, and it intends to fully finance the deal through cash on hand and its existing credit facilities.
Diedrich makes and sells K-Cup refills for Green Mountain Coffee's single-cup Keurig brewer system through a licensing agreement.
Peet's, which is looking to enter the fast growing single-cup coffee market, had earlier this month offered $26 a share for Diedrich, in a $212 million deal.
In a separate statement on Monday, Diedrich, a wholesale coffee roaster and distributor, said it was evaluating the Peet's revised offer.
Shares of Diedrich shot up 28 percent to $33.25, while those of Peet's were down 3 percent and Green Mountain shares were up marginally in premarket trade Monday.
(Reporting by Viraj Nair in Bangalore; Editing by Anne Pallivathuckal)