Dutch coffee company DEMB in buyout talks
D.E. Master Blenders 1753, the Dutch coffee company that was spun off by Sara Lee Corp. last year, said Thursday it is in talks to be acquired by a group led by private German investment company Joh. A. Benckiser GmbH for around 7.6 billion euros ($9.7 billion).
Benckiser, which has already accumulated 15 percent in Master Blenders, also owns stakes in Peet's Coffee & Tea Inc. and Caribou Coffee, among others.
Master Blenders said in a statement the potential buyers are looking at a price of 12.75 euros per share, which represents a 33 percent premium to Wednesday's closing price.
But a formal offer hasn't yet been made and Master Blenders underlined there is no guarantee one will be, describing the talks as being at an "early stage."
The company's shares soared 26 percent to 12.14 euros in Amsterdam trading Thursday.
The offer comes after what has been a poor start for Master Blenders as an independent company.
Shortly after being spun off from Sara Lee in June, Master Blenders restated earnings because of accounting irregularities at its Brazil operations. Since then it has reported worse than expected sales and in February it cut earnings estimates for 2013.
Chief Executive Michiel Herkemij departed in December, citing a difference of opinion with the board, leaving Chairman Jan Bennink to run the company.
Master Blenders may also face a lawsuit from investors who say they were misled in the company's initial public offering prospectus, though the company says its accounting problems only came to light after the listing.