A nearly $14 billion takeover offer for Keurig Green Mountain includes a pledge to keep it independent and headquartered in Vermont, but as part of a growing international coffee conglomerate.
JAB Holding, based in Luxembourg, Monday unveiled a $92-per-share cash offer for Keurig. That’s a 72 percent premium over the $51.70 a share where Keurig closed Friday, but it’s still $60 a share less than where GMCR was trading a year ago.
“The stock market likes growth, and they like profitability, and Keurig's had no growth,’’ Jill Brown, an international business strategy professor at Bentley University, said in an interview Monday afternoon.
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Keuring still gets more than 80 percent of its revenue from sales of its iconic K-cup single-serving coffee and beverage brewing devices. K-cup sales rose just 1 percent, however, during the year ended Sept. 26, while sales of Keurig brewing machines fell 23 percent during the same period. The $300 Keurig Kold single-glass soda-brewing device unveiled in September has been widely criticized as overpriced and less convenient than just buying cans of soda.
According to securities filings, Keurig has 700 employees in Massachusetts, mostly at its Burlington office; 2,000 in Vermont; and another 3,300 around the world.
Vermont Gov. Peter Shumlin said: “I have spoken with Keurig Green Mountain CEO Brian Kelly, who has indicated to me that the company will remain headquartered in Waterbury and that there are no plans for any reduction is workforce. That is incredibly good news. Keurig Green Mountain has been important part of Vermont’s economy, culture, and history for decades. I have reached out to officials at JAB Holding to offer Vermont’s assistance and commitment to ensuring that remains true for decades to come.”
The companies were not commenting beyond prepared media statements.
JAB already owns Caribou Coffee, Peet’s Coffee, Stumptown Roasters, Gevalia, and several other coffee brands, which it describes as an effort to create a “global coffee platform.’’
Brown, the Bentley professor, said after the stock-price roller-coaster Keurig has been on – down 61 percent for the year – becoming a privately-held company could give Keurig breathing room to invent and reinvent and potentially come up with the next great revolutionary innovation on the scale of the K-cup, without the distraction of quarterly earnings expectations.
“Creativity and new developments take time and so when they get out of the public domain, they have that time again,’’ Brown said, “without the reporting that's required every 90 days.’’
With videographer Tony Sabato