Starbucks eyes Coffeeheaven

Speculation is mounting that coffee giant Starbucks is poised to make a take over approach for Coffeeheaven International, the Eastern European coffee chain.

Starbucks is understood to be the front-runner to make a potential bid for Coffeeheaven, but other coffee shop chains, such as UK-based Caffe Nero, may throw their hat into the ring if an approach materialises from the US giant.

It is thought an initial take-over offer could emerge over the coming weeks and a price of between 55p and 60p a share may be enough to seal a deal.

Coffee companies such as Starbucks want to expand their presence in Central and Eastern Europe, which have higher growth potential than the mature markets of the US and UK.

Coffeeheaven, which is listed in Warsaw and on London’s AIM market, has 89 coffee shops in Poland, Czech Republic, Latvia, Bulgaria, Slovakia, Hungary and Romania. For the year ended 31 March, Coffeeheaven delivered total store net sales of £16.8 million and like-for-like sales growth 16 per cent.

A Starbucks spokeswoman said: “Starbucks has no current announcements to make relating to Coffeeheaven.” This afternoon, shares in Coffeeheaven were trading at 40p.

In January 2008, Starbucks president, chairman and chief executive Howard Schultz said: "We opened our first store in Prague this month [January] to near-record crowds and sales, and given the century-long cafe tradition there, it's a market that we view as a great opportunity to compete and succeed. Further, the strong initial response is a great sign for our expansion in Central and Eastern Europe. We plan for Poland and Hungary to be the next markets there."

An industry source pointed out a potential bid by Starbucks could be complicated because the US giant typically uses franchisees overseas, while Coffeeheaven manages its own shops.

Coffeeheaven executive chairman Richard Worthington dismissed the speculation. A Caffe Nero director stressed it was not talking to Coffeeheaven.

Speculation has also linked Whitbread, which owns Costa Coffee, to a potential bid for Coffeeheaven. But Whitbread chief executive Alan Parker said: “We have a strong international Costa [Coffee] business and we have had no direct contact with Coffeeheaven and no intention of developing that.”