Harvard Makes Big Bet that Starbucks/Teavana Deal Goes Through (SBUX) (TEA)

November 29, 2012 5:06 PM EST
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Harvard College's endowment is making a big bet that Starbucks (NASDAQ: SBUX) takeover of Teavana Holdings (NYSE: TEA) goes through.

In a 13D filing after the close, the Harvard Management Company disclosed owning 2,240,000 shares of Teavana, or 5.77% of the outstanding shares. All the shares were acquired after the merger was announced on November 14th.

On that date, Starbucks announced that it would acquire Teavana for $15.50 per share in cash. However, shares of Teavana have traded at a significant discount to the offer price on allegations from Glaucus Research that Starbucks will walk away from the deal on claims that the company is misleading customer about its claims that its teas are pesticide free.

Shares of Teavana Holdings closed at $14.23 on Thursday, offering a 9 percent spread.

Harvard acquired stock at prices from $14.46-$15.45 from 11/15-11/28. It is unclear if the firm is hedged by shorting Starbucks.

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