Caffe Diva considering expansion
The Portland-based company, which owns the local Marsee Baking shops, is still in merger talks
Wednesday, June 14, 2000
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By Andy Dworkin of The Oregonian staff
After taking a five-month breather from a buying spree, Portland's Caffe Diva is pondering two more acquisitions as it continues to negotiate a merger with an airport concessionaire in California.
In March, San Diego-based Creative Host Services Inc. signed a letter of intent to buy privately held Diva in a stock swap deal. Creative Host runs airport concessions and provides in-flight catering; it also has agreed to acquire Portland-based Macheezmo Mouse Restaurants.
The deal will give Diva shareholders a public market for their investment. Creative Host shares trade on the Nasdaq small-cap market, though the company has applied for listing as a Nasdaq National Market Issue.
The stock swap has been pending since March, partly while Diva waited for accountants to finish auditing its books for the second half of 1999, said Ron Davis, Caffe Diva president.
Diva's purchase of several Portland-area businesses in the second half of 1999 complicated the audit. The deals include the local Marsee Baking shops, the bakery division of Moonstruck Confectionery Co. and the Bagel Basket chain. Diva also owns and operates 28 coffee shops in six states.
A surprising rise in the price of Creative Host's stock has also complicated merger talks, Davis said. Shares traded about $10 when the agreement was announced but now trade at more than $25. Davis said he thinks the company's worth remains about $10 to $12 a share.
Davis will meet with Creative Host leaders today and Thursday to discuss the terms of the stock swap and other details of the deal, the outcome of which should be known within a couple of months.
In the meantime, Diva will restart an acquisition drive it stopped while it digested its previous purchases and considered the stock swap.
"We have two acquisitions that are pretty imminent, by the end of July, I think," Davis said. He declined to elaborate.
Davis said Diva also may sell off or pare down some of its current operations, such as the Bagel Basket stores.
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