Market Overview

Caribou Coffee Bought for $16 per Share

Joh. A. Benckiser, a German holding company, announced that it would acquire Caribou Coffee (NASDAQ: CBOU) for $16 per share in cash (a total of approximately $340 million) on Monday. The agreement represents a premium of about 30 percent to the stock's Friday closing price.

Caribou will continue to be operated as an independent company; it will keep its management team, brand and growth strategy, while its headquarters will remain in Minneapolis.

Shares of Caribou at one point traded slightly above the $16 purchase price, but rapidly corrected back. This may suggest that traders are comfortable with the deal closing. Last week, shares of Clearwire (NASDAQ: CLWR) spiked far above the $2.90 offer Sprint (NYSE: S) had made to purchase the company. On Monday, Clearwire accepted a $2.97 offer.

The move to acquire Caribou follows JAB's acquisition of another coffee shop operator earlier this year: Peet's Coffee and Tea. For Peet's, JAB paid $974 million.

In addition to its coffee-related holdings, JAB also owns Coty, the cosmetics maker; Jimmy Choo, the crafter of sleek women's shoes; and Reckitt Benckiser, the household products giant.

Caribou, founded in 1992, is one of the leading branded coffee companies in the United States. In the U.S., based on the number of coffeehouses, Caribou Coffee is the second-largest company-owned premium coffeehouse operator. As of September 30, the company had 610 coffeehouses with 202 franchised locations. Starbucks (NASDAQ: SBUX), of course, continues to dominate the market.

Shares of Caribou Coffee traded up 30.03 percent to $16.02 midway through trading Monday.

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