* Offers $16.00 per share to take Caribou private
* $340 mln offer a 30 pct premium to Caribou's Friday close
* Caribou shares trade above offer price
* Offer way too low, hedge fund shareholder says
By Siddharth Cavale and Aditi Shrivastava
Dec 17 The Benckiser group agreed to buy Caribou
Coffee Co Inc for about $340 million in a deal that
would boost the German investment company's position as the No.
2 U.S. purveyor of premium coffee, but still well behind
Joh. A. Benckiser Group (JAB), the investment vehicle of the
Reimann family, offered $16 per share to take Caribou private, a
premium of about 30 percent to the stock's Friday close of
Adding Caribou's 610 outlets in 22 U.S. states to
Benckiser's Peet's Coffee and Tea outlets would give the group a
little more than 800 U.S. outlets. Starbucks has about 11,000.
Caribou shares jumped to $16.64 on the Nasdaq, suggesting
some investors anticipate a higher offer, before easing back to
$16.01 by early afternoon, still just above the offer price.
"We don't think they are paying anywhere near enough. The
price should be closer to $30-$35," said Richard Fearon,
managing director of Hedge fund Accretive Capital Partners LLC,
whose largest shareholding is in Caribou.
"At $16 per share (Caribou) is being stolen for less than
0.9 times sales and 10.5 times earnings before interest, taxes,
depreciation and amortization," Fearon said.
Peet's, in contrast, was taken private at 2.4 times sales
and 21 times EBITDA, Fearon said.
Craig Hallum analyst Matt Bendixen, who has a $19 target
price on the stock, said he believed Caribou could get a better
offer. "The buyer has got a pretty good value here on the
purchase price," he said.
However, intrinsic valuation on Thomson Reuters StarMine
suggested that Caribou's stock should be trading around $8.22,
compared with Friday's close of $12.32, indicating stronger
growth than analysts had anticipated.
StarMine's models take into account analyst estimates for
growth, usually over five years, and then model the typical
growth trajectory of companies over a longer period of time.
"Investing in a growing premium coffee space is the
overarching theme here, and Caribou is a very cheap way to do
that," Stephens Inc analyst Will Slabaugh told Reuters.
The Reimann fortune comes from the Benckiser chemicals
company, founded in 1823, one of the predecesor companies of
London-based Reckitt Benckiser Group Plc.
The family also controls fashion group Coty, which
it unsuccessfully tried to merge with Avon Products Inc
in a $10.7 billion deal earlier this year, and owns Labelux
Group, manager of luxury brands Bally, Belstaff and Jimmy Choo.
Benckiser bought Peet's Coffee & Tea Inc for
about $1 billion in July. It further bulked up its coffee
business in October when it raised its stake in Amsterdam-listed
D.E Master Blenders 1753, the Douwe Egberts coffee
business spun out of Sara Lee, to just over 15 percent.
Caribou Coffee, founded in 1992, operates its own outlets
and licences its coffee to Green Mountain Coffee Roasters Inc's
for its Keurig single-cup coffee brewers.
Caribou reported a 3.5 percent rise in comparable-store
sales in the third quarter, helping it post a
Chicago-based BDT Capital Partners, founded by Byron Trott,
a long-time confidant of billionaire investor Warren Buffett,
will participate in the Caribou deal as a minority investor and
Once the deal is completed, Caribou will continue to be
operated as an independent company run by its current management
and will remain based in Minneapolis, Minnesota.
Caribou Coffee was advised in the deal by Moelis & Co LLC.