January 5, 2013 in Business

Dempsey’s group wins bid to purchase Tully’s

Starbucks, citing higher offer, says fight not over
Melissa Allison Seattle Times
 
Mike Siegel photo

Patrick Dempsey meets the staff at the Tully’s Coffee on Western Avenue near the Pike Place Market in Seattle on Friday.
(Full-size photo)

What’s next

A bankruptcy judge is set to review the decision Jan. 11. Starbucks says it’s in a “back-up position” to buy 25 of the 47 Tully’s cafes, with another undisclosed bidder making an offer for the remainder.

Associated Press

SEATTLE – The battle for Tully’s Coffee may not be over.

While actor Patrick Dempsey greeted star-struck fans and baristas at Tully’s stores Friday morning, just hours after his investment group won a bankruptcy-driven bid for the chain, Starbucks officials said the competition for Tully’s isn’t over.

Starbucks said it and another bidder offered $10.56 million for the financially struggling chain, more than Dempsey’s group’s $9.15 million. It declined to say who the other bidder was, but a source who didn’t want to be identified said it was AgriNurture, a Tully’s franchisee in the Philippines.

Dempsey’s group, which includes an undisclosed number of silent partners, won the auction for all 47 Tully’s locations after 13 hours of negotiations among seven bidders on Thursday. The final decision was made by a group of Tully’s executives, creditors and lawyers.

The deal, which is expected to close in late January, will not affect Tully’s wholesale business, which was sold to Green Mountain Coffee Roasters in 2009.

A bankruptcy court judge is set to review Thursday’s decision Jan. 11. Typically, any party that wants to oppose such a decision must file an objection before the court date.

It is unclear whether Starbucks will formally oppose Dempsey’s victory. “We’re evaluating our options,” said Starbucks spokesman Zack Hutson.

Starbucks said it made an offer for 25 Tully’s locations, including 12 at Boeing sites. A source said it offered to pay about $6 million for those stores.

“They wanted to disband the company, and they lost, and they’re upset by that,” said Dempsey, who added he does not think Starbucks will succeed in changing the decision.

Dempsey lives in Malibu, Calif., but plans to be in Seattle a couple times a month, which he said shouldn’t be difficult. “I love it up here, seeing the rain and the ferries,” he said.

Dempsey’s company, Global Baristas LLC, plans to keep the Tully’s name, the Associated Press reported. Although Dempsey said he has ideas about what Tully’s needs to become a profitable company – it has turned a profit in just two of its 20 fiscal years – Dempsey said he will not be the CEO.

Among other things, he wants to “spruce up” Tully’s stores, energize its 500 employees, including possibly giving them raises, and update the company’s bookkeeping system.

Dempsey visited a Tully’s shop just north of Pike Place Market on Friday, where dozens of fans applauded when he entered and later posed for pictures with him.


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