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Peet's Sold for $1 Billion, Downtown Regulars Shrug

Popular downtown hangout is one of 201 company-owned locations sold as part of investment firm Joh. A. Benckiser, which is expected to significantly expand the brand's footprint on the East Coast and in Europe.

Coffee chain Peet's Coffee & Tea announced Monday that investment firm Joh. A. Benckiser had purchased the Bay Area company for $73.50 per share in cash, or a whopping $1 billion.

The news was greeted by the longtime regulars at Peet's on Throckmorton Ave. downtown with a collective shrug.

"I don't really think it will impact anything," Sausalito resident Orlee Rabin said. "I think it just showcases what really good coffee can do and where the market is headed. I'm from the Bay Area, and I'm proud that a local Berkeley coffee shop grew into such a great thing."

Several other downtown Peet's customers agreed, with some saying that while they hoped the company would retain its quality and connection to the fabric of its local communities.

In recent years, Peet’s has been on the buyer's and seller's end of rumors about coffee chain takeovers. Most recently, , which has three locations in Mill Valley, was believed to be the top contender to buy the San Francisco-based chain. Before that, Peet’s was thought to be interested in buying the Irvine-based Diedrich Coffee.

Monday's agreement, which was unanimously approved by Peet's board of directors, represents a premium of approximately 29 percent over Peet's closing stock price on Friday, the company announced. When the sale is completed, Peet’s will be privately owned, but the current staff will remain in place, according to a company statement.

"In my experience it is rare to find a company and a brand as special as Peet's,” said Jean-Michel Valette, chairman of the board of Peet's. “We are pleased that JAB recognizes this and that Peet's existing shareholders will be rewarded with significant value."

With just 201 company-owned shops, two-third of which are in Northern California, the seemingly inflated price was based on the faster-growing, more profitable half of Peet's business: its "direct-to-store distribution operation, which sells packaged coffee to grocery and club stores nationwide," according to the San Francisco Chronicle.

Nick Setyan, an analyst with Wedbush Securities, told the Chronicle that in grocery stores where it competes head-to-head with Starbucks, Peet's has a higher market share.

"I think they are worth more than $1 billion," Setyan told the paper.

 

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