Diedrich’s odd disclosure…
Late yesterday, Peet’s Coffee & Tea (PEET), my personal favorite when it comes to caffeine delivery devices, announced that it was buying Diedrich’s Coffee (DDRX) for $213 million.
Coincidentally, Diedrich’s filed what’s likely to be its last 10-Q yesterday. But what’s surprising was the very first exhibit in the 10-Q: an agreement with CFO Sean McCarthy. Now, McCarthy was named CFO back in January 2006. But the agreement was dated May 1, 2008 and was filed yesterday — roughly 17 months after it went into effect.
We don’t mean to be sticklers here, but what was the hold up with getting this into a filing? By our count, Diedrich has filed 4 10-Qs and 2 10-Ks since May 2008. Even if we assume that it was a typo and May 1, 2008 was really May 1, 2009 — not that that makes sense, but we’re going hypothetical here — there was still a K and a Q that they agreement could have been included in. The agreement itself confirms “in writing” the terms of a change in control, so presumably McCarthy had been working for the past three years under some sort of informal — or at least, non-written — understanding.
Now maybe it’s just an odd coincidence that this agreement was included on the very day that the company announced it was being acquired. But that’s a bit hard to swallow — kind of like coffee that’s been sitting in the pot for too long.
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Posted in Tags: 10Qs, M&A |
 4 Comments » |
November 3rd, 2009 at 11:21 am
went into effect
We don’t mean to be sticklers here,…
Yes you do.
November 3rd, 2009 at 11:38 am
Thanks, @eh for pointing out my mistake! As I say all the time, everyone needs an editor. I mixed up effect and affect and have fixed the error. Thanks for being mine today!
November 3rd, 2009 at 11:48 am
Could be a few more of those critical filings even using typo May 1, 2009. Two 8-Ks.
July 28 and Oct. 27 2009.
One 10-Q mentions being “vertically integrated, allowing us to control the quality of our product at all stages.” Casual reader might take that as a smokestack situation
whereby PEET was only looking to be free-standing w/o being on hunt for acquistions which would be horizontal integration.
They do bother to mention having a Calif. management lawsuit about workers overtime pay & work issues. But what amused me was the Cal earthquake loophole.
“Because we have only one roasting facility, a significant interruption in the operation of our roasting and distribution facility could potentially disrupt our operations.”
November 3rd, 2009 at 2:16 pm
Law Office of Brodsky & Smith, LLC Announces Investigation on Behalf of Shareholders of Diedrich Coffee, Inc.
2:07p ET November 3, 2009 (Business Wire)
Law office of Brodsky & Smith, LLC announces that it is investigating potential claims against the Board of Directors of Diedrich Coffee, Inc. (“Diedrich Coffee” or the “Company”) (Nasdaq:DDRX) relating to the proposed acquisition by Peet’s Coffee & Tea, Inc. (“Peet’s”). Peet’s has agreed to acquire Diedrich Coffee in a deal valued at approximately $213 million.
Under the proposed agreement, Diedrich Coffee shareholders will receive $17.33 in cash and a fraction of a Peet’s share valued at about $8.67 for every share of Diedrich Coffee common stock they own. The investigation concerns possible breaches of fiduciary duty and other violations of state law related to the Diedrich Coffee board’s approval of the proposed merger. The transaction appears to be unfair, in part, given that Diedrich Coffee stock was trading at $29.88 a share as recently as October 22, 2009 and was trading at $25.39 a share on August 4, 2009.
If you own shares of Diedrich Coffee and wish to discuss the legal ramifications of the proposed acquisition, or have any questions, you may e-mail or call the law office of Brodsky & Smith, LLC who will, without obligation or cost to you, attempt to answer your questions. You may contact Jason L. Brodsky, Esquire or Evan J. Smith, Esquire at Brodsky & Smith, LLC, Two Bala Plaza, Suite 602, Bala Cynwyd, PA 19004, by e-mail at clients@brodsky-smith.com, or by calling toll free 877-LEGAL-90.
SOURCE: Brodsky & Smith, LLC
Brodsky & Smith, LLC
Jason L. Brodsky, Esquire
Evan J. Smith, Esquire
877-LEGAL-90
clients@brodsky-smith.com