JAB Wagers On Coffee’s Strength With Potential JDE Peet’s IPO

In a wager that coffee’s strength will be attractive to investors during the pandemic, the investment company behind Pret A Manger, Panera Bread and Peet’s Coffee is reportedly proceeding with a coffee business initial public offering (IPO). JAB Holdings’ intended offering of JDE Peet would likely be the biggest IPO in Europe in 2020 to date, The Wall Street Journal reported.

JDE Peet’s has ownership of names that provide coffee via supermarkets and cafes, with the inclusion of Senseo, and Peet’s Coffee, among others. Approximately 80 percent of JDE Peet’s coffee is sold to be used at home, which is said to be a market that has persisted to date amid the lockdowns.

JAB reportedly intends to raise €1.5 billion to €2 billion from the sale of a JDE Peet’s minority stake and make shares available on the Euronext Amsterdam stock exchange. Approximately €700 million would be from the sale of new shares, and the proceeds would be utilized to pay debt.

The remainder is forecast to come from current shareholders, with the inclusion of Mondelez International Inc., selling their holdings.

Companies owned by JAB have aimed to gain from increased demand for coffee at home. Pret A Manger, for its part, recently rolled out whole-bean and ground coffee sold on Amazon and its locations. As it stands, the offering comes at a rough time for consumer goods firms, but analysts note that coffee is relatively strong even at times that consumers reduce spending.

In December, news surfaced that JAB Holdings was joining some of the most renowned coffee brands in the world to create a stronger rival to compete with Nestlé and Starbucks. At the time, it was noted that the investment company would merge Jacobs Douwe Egberts Group, the coffee roaster, and Peet’s Coffee, the premium U.S. coffee brand, into a single entity to get ready for a listing.