Investment Group Eyes Coffee Maker Douwe Egberts

AMSTERDAM--A group led by investment firm Joh. A. Benckiser GmbH is in talks with the owner of Douwe Egberts coffee about a potential takeover which could value the Dutch company at over 7.58 billion euros ($9.7 billion), as JAB looks to further build its presence in the $75.8 billion global coffee market.

D.E. Master Blenders, which listed on the Amsterdam stock exchange last June, said it was approached by JAB--co-headed by former Reckitt Benckiser chief executive Bart Becht--with an indicative offer of EUR12.75 a share, including dividends. It has agreed to allow JAB and its advisers to conduct due diligence.

JAB manages the investments of Germany's wealthy Reimann family. Last year JAB bought U.S.-based Peet's Coffee & Tea for around $1 billion. With about $370 million in annual revenues in 2011, the Emeryville, California-based company sells coffee and tea both through retailers and its own chain of about 200 U.S. coffee houses. It also acquired Minneapolis, Minnesota-based Caribou last year for about $340 million. It operates 610 coffee houses across the U.S. and had $326 million in 2011 revenue.

JAB's assets total more than $10 billion. It already owns a stake of just over 15% in D.E. Master Blenders.

Under the leadership of current Chief Executive Jan Bennink, D.E. Master Blenders was spun out of U.S.-based Sara Lee Corp. and listed on the Amsterdam Stock exchange in June last year. Mr. Bennink previously worked for several consumer goods companies, including Reckitt Benckiser and France's Danone SA.

DE is No. 3 in the global coffee roasting sector with $4 billion in annual sales, behind Nestle SA with $12 billion and Kraft Foods Inc. with $6 billion. According to data from Euromonitor the global coffee market is estimated to be worth $75.8 billion.

Mr. Bennink at the time of the IPO said the company wanted to become the No. 2 two in the market. JAB wasn't immediately available to comment. DE didn't provide details of other investors that are part of the JAB-led consortium.

JAB is managed by Mr. Becht, Peter Harf and Olivier Goudet. The company's holdings include shoemaker Jimmy Choo Ltd. and Coty Inc., home to nail-polish maker OPI and other beauty brands.

JAB's indicative price for DE offers a 33% premium to Wednesday's closing price, and a premium of 59% compared with when it first started trading at EUR8 a share.

--Neena Rai in London contributed to this article

Write to Robin van Daalen at [e-mail]

Subscribe to WSJ: http://online.wsj.com?mod=djnwires