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Is SodaStream (SODA) Still 'In-Play' for Coke (KO)?

June 7, 2013 1:13 PM EDT Send to a Friend
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Shares of in-home beverage maker SodaStream (NASDAQ: SODA) were party to a wild ride Thursday following takeover reports, which were later denied. However, speculators still believe 'where there's some, there's fire'.

Traders woke up Thursday to reports from Israel's Calcalist paper (where SODA is based) that PepsiCo (NYSE: PEP) was nearing a deal to acquire SodaStream for $2 billion. Shares of SodaStream surged over 30% on the reports only to come crashing back down after PepsiCo flatly denied the rumors.

In addition to PepsiCo being mentioned in a possible deal with SodaSteam, rival Coca-Cola (NYSE: KO) was also mentioned but by a separate publication - Globes.

While SodaStream publicly trashed "big soda" in this year's Super Bowl and other TV ads, a deal between the two might be a match made in heaven --- think about making a fountain-fresh Coke in your kitchen. That said, a takeover might not be in the cards. However, a partnership could make sense according to analysts.

JPMorgan analyst John Faucher said while Coke and Pepsi are more aware of SODA now than they were 2 or 3 years ago, some sort of partnership would be much more likely than an outright acquisition. "We don't see much in a way of distribution leverage by combining, which is what we believe you need to justify a deal," Faucher said.

SodaStream for its part is not talking. "We do not comment on rumor and speculation," spokeswoman Yonah Lloyd told StreetInsider.com yesterday.

Now we have a cleverly-crafted response from Coke on the matter. In a statement to StreetInsider.com, Coke said "There may have been some speculation in the media regarding a new product or deal. However, The Coca-Cola Company has not made an announcement at this time. We thank you for your interest."

Hmm...

Shares of Soda are up 1% Friday after rising 2.7% on Thursday.




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