(RTTNews) -  Diedrich Coffee, Inc. (DDRX: News ) said Wednesday that its Board of Directors determined that the recently revised offer from Green Mountain Coffee Roasters, Inc. (GMCR: News ) continues to be a superior proposal to the terms of the merger agreement with Peet's Coffee & Tea, Inc. (PEET: News ).

Under the revised proposal, Green Mountain had offered to acquire all the outstanding shares of Diedrich common stock for $32.00 per share in cash pursuant to a cash tender offer, with no financing and no due diligence contingencies.

In its revised offer, Peet's had proposed to acquire Diedrich in a cash-and-stock transaction valued at $30.35 per share, or a total value of about $251 million, based on the closing price of Peet's common of stock of $32.86 on November 24. The original proposal from Peet's was for a cash-and-stock transaction valued at $26.00 per share or about $213 million.

In its statement, Diedrich said, ''Peet's most recent proposal expired this morning and thus the consideration payable by Peet's reverted to the original offer of $26.00 per share. Under the terms of the Peet's merger agreement, Peet's has until 5:00 p.m. Pacific Time on Friday, November 27, 2009, to negotiate with Diedrich Coffee to amend the current merger agreement ...''

Diedrich said if Peet's does not submit a revised proposal, which is at least as favorable as
Green Mountain's revised offer, the company intends concurrently to terminate the Peet's merger agreement, to pay the termination fee required thereby to Peet's and to enter into the new merger agreement with Green Mountain.

Responding to Diedrich's statement, Peet's said Wednesday that as per the terms of the existing merger agreement the company entered into with Diedrich on November 2, the agreement remains in effect until November 30 and until then Peet's has the right to amend its offer such that Diedrich's board of directors could no longer determine that Green Mountain's proposal continues to be a superior proposal.
Patrick O'Dea, President and CEO of Peet's, said today, "As provided for in our merger agreement with Diedrich, over the next several days we will consider all our alternatives and take the action we deem to be in the best interests of Peet's shareholders."

Meanwhile, Green Mountain said it was pleased that Diedrich determined its offer to be superior to the offer from Peet's.

DDRX closed Tuesday's regular trade at $33.91, up from the prior close of $33.65, on 193,100 shares.

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