Coffee Roaster War Brewing (DDRX, PEET, GMCR)

The acquisition of Diedrich Coffee, Inc. (NASDAQ: DDRX) is getting even more heated.  We have seen a raised bid from Peet’s Coffee & Tea, Inc. (NASDAQ: PEET) to acquire Diedrich’s for $32.50 per share in cash and stock.  Green Mountain Coffee Roasters, Inc. (NASDAQ: GMCR) also boosted its price above the Peet’s bid recently, and now the company is saying that its is “firmly committed to this strategic combination and are in the process of evaluating our next steps.”

Green Mountain said that it believes that it can close this deal in early 2010 and also believes that its own offer is more attractive to Diedrich’s shareholders as it is an all-cash offer.

The winner here is almost certainly going to be Diedrich’s, although there is now a premium to the $32.50 buyout.  Shares are trading at $33.50 before the open.  It is almost too bad these companies could not see ahead back when Diedrich’s was a penny stock.  Its trading range this year is $0.21 to $33.97.

Before the open, Green Mountain shares are up 1.2% at $63.74 and Peet’s shares are flat at $32.56.  Interesting times indeed.