NEW YORK (AP) -- Green Mountain Coffee Roasters Inc. is likely to prevail over rival Peet's Coffee & Tea Inc. in a bidding war for Diedrich Coffee Inc., an analyst said Wednesday.
Green Mountain earlier Wednesday lifted its all-cash offer for Diedrich to $290 million, or $35 per share, topping a lower cash-and-stock bid from rival Peet's, which offered $32.50 per share earlier this week. Green Mountain's bid is higher than a previous offer of $265 million, or $32 per share.
Green Mountain is the likely winner because it can ultimately bid higher and its offer is all cash, which makes it more attractive, Janney Capital Markets analyst Mitchell B. Pinheiro wrote in a client note.
"The latest offer from Green Mountain represents a more significant premium relative to prior offers, suggesting to us that Green Mountain is ready to close the deal now and move forward," wrote Pinheiro, who rates shares of Green Mountain "Buy."
Diedrich, in a statement, said its board believes Green Mountain's offer is superior to Peet's offer.
Green Mountain's revised agreement also includes a termination fee ranging between $8.5 million and $11.5 million. If the deal is terminated by either company, the fee will be payable to Diedrich under certain circumstances.
Shares of Green Mountain slipped $1.18 to $60.86. Peet's stock rose 13 cents to $32.91, and Diedrich advanced $1.27, or 3.7 percent, to $35.24.