A FIRM backed by one of the wealthiest families in Germany was last night closing in on a multibillion-euro takeover of the owner of Douwe Egberts coffee and Pickwick Tea.
German firm Joh A Benckiser, owned by the billionaire Reimann family, which last month approached Douwe Egberts owner D.E. Master Blenders about a possible takeover, is believed to be ready to make a formal bid today.
Benckiser – already Dutch-listed Master Blenders – biggest shareholder with a stake of over 15 per cent – revealed last month that it was in talks about a €12.75 per share offer for the shares of the company it does not already own.
The offer represents a 33 per cent premium to the level the shares were trading at before the offer was revealed. And an offer at this level would value the whole firm at around €7.6bn (£6.5bn).
Benckiser had previously said that its investment in Master Blenders – which also owns Senseo coffee – was a “minority and purely financial investment.”
But Benckiser, co-led by former Reckitt Benckiser boss Bart Becht, is trying to build a global coffee brand to rival current leader Nestle.
The German group snapped up both Peet’s Coffee & Tea and Caribou Coffee chains last year.
Adding Master Blenders – already the world’s third-largest coffee company by sales, would give it a strong position in Europe and Latin America.
Master Blenders – which was spun out of Sara Lee last year – makes most of its revenue from manufacturing hot drinks, many of which are sold through beverage machines
Marco Gulpers, analyst at ING, said this week that a deal was “highly likely” and that he did not expect a rival offer. “The price is full in our view,” he said.
He calculated that the €12.75 per share offer was 15.4 times the ratio of enterprise value (EV) to earnings before interest, tax, depreciation and amortisation (EBITDA) for 2013.
Neither Benckiser nor Master Blenders were available to comment last night.