Report: Starbucks closing in on taking 10% stake in SodaStream

Starbucks (SBUX -0.9%) is in advanced talks to purchase 10% of SodaStream (SODA +11.5%), according to a report from Globes.

The Israeli publication indicates the deal price could be at a 30% premium over SodaStream's market price.

The spotlight turned to SodaStream after Coca-Cola and Keurig Green Mountain struck what could be a disruptive deal earlier this year.

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Comments (11)
  • Patent News
    , contributor
    Comments (1475) | Send Message
    and why exactly wouldnt SBUX just have bought shares on open market and not pay 30% extra?
    23 Apr 2014, 12:43 PM Reply Like
  • User 22537101
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    Comment (1) | Send Message
    because the 'float' of available shares is usually such that if an order went in for 10% of the company [HUGE] "at the market" price would skyrocket more than 30%
    23 Apr 2014, 01:08 PM Reply Like
  • Purple_K
    , contributor
    Comments (508) | Send Message
    You're kidding right? That's what execution brokers' function is - to massage a huge position into / out of circulation WITHOUT doing that.
    23 Apr 2014, 05:49 PM Reply Like
  • civ-e
    , contributor
    Comments (705) | Send Message
    couldn't they accumulate gradually and get most of the shares on the open market for about the current price?
    23 Apr 2014, 02:00 PM Reply Like
  • John Grandits
    , contributor
    Comments (666) | Send Message
    SBUX has to exhibit and pay a premium to SODA for goodwill and synergies they believe will be created by a strategic partnership. Going into the open mkt or through private crosses to accumulate a 10% stake will not convey the same message to SBUX/SODA shareholders/management nor potential investors.
    23 Apr 2014, 02:14 PM Reply Like
  • civ-e
    , contributor
    Comments (705) | Send Message
    ok thanks. general question : so when you pay a premium , whose shares are you buying ? was Sodastream holding a stack of SODA shares (which were part of the total # of shares outstanding) that they are selling to starbux? Or did they create an additional 10% of shares (dilute the total) to hand it over to starbux for cash?
    23 Apr 2014, 02:44 PM Reply Like
  • Whatsup!
    , contributor
    Comments (2106) | Send Message
    They're not doing a hostile takeover. They are wanting to partner with Soda. Just purchasing 10% of the company wouldn't achieve SBUX's goals. SBUX is figuring out how SODA will increase SBUX revenues and profits and how SODA/SBUX will dedicate company resources to achieve both of their goals. An uncooperative SODA could have a negative impact on SBUX business. based on supply and demand, an extremely liquid company would also have a huge stock price increase.
    23 Apr 2014, 02:05 PM Reply Like
  • civ-e
    , contributor
    Comments (705) | Send Message
    yahoo finance shows average volume of 1.6M shares, x that by $40 (yesterday closing price), that's over $60million which is already close to 10% of yesterday's market cap.
    23 Apr 2014, 02:06 PM Reply Like
  • ThetaDecay
    , contributor
    Comments (103) | Send Message
    That doesn't mean 1.6M unique shares were traded every day. For example: if I buy 100 shares in the morning and sell those same shares before the close, I have increased the daily volume by 200.


    The more daily turnover there is in a stock, the greater the discrepancy between daily volume and the number of unique shares traded. Given the proliferation of algorithmic trading and SODA's popularity with day traders, it is safe to say that the daily volume is much larger than the number shares available per day.
    23 Apr 2014, 11:16 PM Reply Like
  • markb
    , contributor
    Comments (587) | Send Message
    I'd be surprised if any premium was paid. If SBUX is bringing the value, they should be rewarded like KO was rewarded the day after they bought 10% GMCR below market.
    23 Apr 2014, 02:39 PM Reply Like
  • jarco
    , contributor
    Comments (2298) | Send Message
    Looks to me that Howard Schultz found a way to simply give SODA some money and a premium at that. Hopefully this gift will allow SBUX to install SODA systems in every cafe in lieu of buying beverage dispensing services from either Pepsi or Coke. Can't imagine any other scenario.
    23 Apr 2014, 03:43 PM Reply Like
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