Caribou Coffee's US$340M acquisition by Joh A. Benckiser Group being challenged in court by Caribou shareholder, claiming that deal undervalues Caribou's stock

Nevin Barich

CHICAGO , January 9, 2013 (Bloomberg LP) – Caribou Coffee Co., Chief Executive Officer Michael Tattersfield and six directors were sued by a shareholder claiming the company’s pending $340 million acquisition by a Joh. A. Benckiser Group affiliate undervalues its stock.

“Shockingly, defendants entered into the proposed acquisition without engaging a qualified investment banker to market the company and manage an efficient auction process,” Bipin Agarwal, a Colorado investor, alleged in a complaint filed today in federal court in St. Paul, Minnesota.

Agarwal’s case is at least the eighth legal challenge to the planned purchase filed in Minnesota state and federal courts since the companies announced the transaction on Dec. 17. Each seeks class-action, or group, status on behalf of all shareholders allegedly being shortchanged.

Closely held JAB’s acquisition of Caribou, which has 610 coffeehouses in 22 states, the District of Columbia and in 10 other nations, follows the Ludwigshafen, Germany-based firm’s purchase last year of a majority stake in Peet’s Coffee & Tea Inc. for about $941.2 million.

JAB is offering $16 a Caribou share in cash. Caribou closed today at $16.05 in Nasdaq Stock Market trading, up 30 percent since the bid was announced.

Claiming a breach of fiduciary duty, Agarwal is seeking a court order blocking the transaction until the parties disclose all material information to Caribou shareholders. Agarwal also demands unspecified money damages.

Blythe Posner, a spokeswoman for Caribou with Ruder Finn Inc. in New York, declined to comment on the lawsuit. Tom Johnson, a spokesman for JAB at Abernathy MacGregor Group in New York, also declined to comment. JAB Beech Inc. is a defendant in the case.

The case is Agarwal v. Caribou Coffee Co., 13-v-73, U.S. District Court for the District of Minnesota (St. Paul).

--Editors: Stephen Farr, Mary Romano

To contact the reporter on this story: Andrew Harris in Chicago at aharris16@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net

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