TORONTO - Cara Operations Ltd. wants to take control of specialty coffee retailer The Second Cup Ltd. in a $21 million deal that would see the food service giant expand its stake in the specialty coffee retailer.

Cara announced Monday it will offer to buy up to three million Second Cup shares at $7 each. The cash bid is nearly 17 per cent higher than Second Cup's closing stock price of $6.00 last Friday.

If the bid succeeds, Cara would increase its stake in Second Cup to 71 per cent from 39 per cent, giving the bigger company control over the coffee chain.

We are making this offer to provide stability in the ownership of Second Cup and allow its management to focus solely on the company's operations, said Gabe Tsampalieros, president and chief executive of Cara.

In addition, the offer will provide a significant measure of liquidity for interested Second Cup shareholders.

Cara said it would formally mail its offer after after an independent evaluation of the coffee company and an independent committee has recommended whether Second Cup shareholders should support the bid.

Last month, Cara and Second Cup's other major shareholders - Toronto's Bregman family - struck a deal to not increase their stakes beyond current levels without notifying the other party.

After Cara's 39 per cent stake, Michael Bregman and his father Louis hold 22.4 per cent of Second Cup between them.

With annual sales of more than $1.6 billion, Cara Operations is one of Canada's biggest food service companies. Cara has about 20,000 employees in businesses such as the Harvey's hamburger chain, Swiss Chalet chicken restaurants, Kelsey's and other restaurants and airport food services and other operations.

Second Cup is Canada's largest specialty coffee retailer with about 400 owner-operator cafes. The company put itself up for sale last year in a bid to boost its sagging share price but took itself off the market in April.

In trading on the Toronto stock market Mondaty, Second Cup shares rose $1.01 to $7.01, while Cara shares rose 30 cents to $6.50.