Sodastream International Ltd (NASDAQ:SODA) Bubbles Over On Starbucks Equity Investment News – PEP, SBUX


Dallas, Texas 04/25/2014 (FINANCIALSTRENDS) – Sodastream International Ltd (NASDAQ:SODA) started bubbling over on Wall Street after news broke about a potential 10% equity stake being possibly taken by Starbucks Corporation (NASDAQ:SBUX). SODA gained as much as 17% during the day, before subsiding to a more earthy 11% by the end of the day’s trading.

Israeli News Reports Fan the Flames

Last week, it was Calcalist, an Israeli financial new daily, that fanned the flames which helped SodaStream bubble over. At that time, it was reported that the company was being approached to sell a 16% equity stake to a major soft drink company. The buyer remained unnamed, but they did throw about possibilities including PepsiCo, Inc. (NYSE:PEP) and Starbucks.

It seemed to be a perfect opportunity for PepsiCo to fight back against The Coca-Cola Company (NYSE:KO) acquisition of a 10% stake in Keurig Green Mountain in February. It was also mentioned in the report that the buyer would have an option to acquire a majority stake at a later date.

The Globes Report

However, it now seems as if the buyer who’s interested is Starbucks, and the stake in question is 10%. This latest report comes from Israeli business new website Globes. The report claims that Starbucks is offering to buy a 10% stake in the company, which the deal values at $1.1 billion. This would place a 30% premium on the market price, since SODA’s market cap was about $850 million when the new report broke.

It’s hardly a surprise that SODA jumped 17%, or that it ended the day 11% higher. If the report turns out to be true, expect a lot more bounce and “bubbliness” from SODA.

Of course, we now have two widely differing reports from different sources. The only thing they can agree on is that Sodastream International Ltd is engaged in negotiations with a major company to sell a large equity stake. Assuming that stays true, it’s still good enough to push SODA up a lot higher in the days to come.