A coffee group may hear bids soon as a Midwest restaurant chain goes to the its favorite bidder this afternoon.
Thanks to an activist shareholder in Farmer Brothers Co., the Torrence, Calif.-based coffee roaster may have a buyer as soon as early January.
The president of New York investment bank Lutin & Co., Gary Lutin, has spearheaded on behalf of dissident Farmer Brothers shareholders a 2-year long effort to sell the family-owned company. Now the group may soon have its way.
According to Lutin, potential suitors for the company have narrowed from 10 to three or four strategic buyers, while a bid would be due in February or March. Prospective buyers likely include Peet’s Coffee & Tea Inc. of Emeryville, Calif., and Green Mountain Coffee Roasters Inc. of Waterbury, Vt. Food service distributors, like Houston’s Sysco Corp. and U.S. Foodservice Inc., of Columbia , Md. also could make offers.
The company has struggled as coffee titans like Seattle ’s Starbucks Corp. continue to detract business. Adding to the competitive pressures are troubles in the executive suite.
In other food-related news, Wichita ’s Fox & Hound Restaurant Group accepted a buyout offer today from Fox Acquisition Company, a recently formed affiliate of Beverly Hills, Calif.-based middle market investor Levine Leichtman Capital Partners, Inc. The group agreed to pay $15.50 cash per share, or $155.4 million, a figure that was matched by two competing private equity offers.
Fox & Hound, which has 75 establishments in about 20 states, said it could terminate the deal, should a better offer develop, but that it had ended a previously announced deal with a buyout team from Dallas-based Newcastle Partners LP and New York’s Steel Partners, II, LP.
The board of Fox & Hound unanimously approved the Levine Leichtman deal today. — Carolyn Murphy
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