Could Starbucks (SBUX) Walk Away from Teavana (TEA) Deal? Yes Says One Analyst
Tweet
Share
E-mail
Get Alerts TEA Hot Sheet
Price: $15.50 --0%
Rating Summary:
1 Buy, 6 Hold, 0 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 10 | Down: 7 | New: 7
Rating Summary:
1 Buy, 6 Hold, 0 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 10 | Down: 7 | New: 7
Join SI Premium – FREE
Takeover target Teavana Holdings (NYSE: TEA) is seeing some downside action early Tuesday after Glaucus Research suggested the company is lying about claims its teas are pesticide free and Starbucks (Nasdaq: SBUX) may walk away from the deal because of it.
From Glaucus:
Starbucks recently agreed to pay $620 million in cash to acquire TEAVANA ("Teavana" or the "Company"), a specialty retailer of loose-leaf teas, tea wares, and tea related merchandise in North America. Teavana tells its customers that its teas are pesticide free. As consumers of Teavana's high-priced teas, we decided to investigate such claims. What we found is shocking. Independent laboratory tests show that Teavana’s teas contain pesticides in amounts that exceed US and EU regulatory limits. In our opinion, not only are lawsuits from the Federal Trade Commission and class-action attorneys inevitable, but once Starbucks learns that they have been deceived into paying a premium price for a tarnished consumer brand, they will walk away from the acquisition.
Shares of Teavana are down 1.2 percent.
From Glaucus:
Starbucks recently agreed to pay $620 million in cash to acquire TEAVANA ("Teavana" or the "Company"), a specialty retailer of loose-leaf teas, tea wares, and tea related merchandise in North America. Teavana tells its customers that its teas are pesticide free. As consumers of Teavana's high-priced teas, we decided to investigate such claims. What we found is shocking. Independent laboratory tests show that Teavana’s teas contain pesticides in amounts that exceed US and EU regulatory limits. In our opinion, not only are lawsuits from the Federal Trade Commission and class-action attorneys inevitable, but once Starbucks learns that they have been deceived into paying a premium price for a tarnished consumer brand, they will walk away from the acquisition.
Shares of Teavana are down 1.2 percent.
Serious News for Serious Traders! Try StreetInsider.com Premium Free!
You May Also Be Interested In
- EU Antitrust Regulators Concerned About Impact of KKR, Telecom Italia Deal on Viability of Wholesale Market - Reuters
- Enphase Energy (ENPH) PT Lowered to $130 at Canaccord Genuity
- B.Riley Upgrades The Children's Place (PLCE) to Neutral
Create E-mail Alert Related Categories
Analyst Comments, Rumors, Trader TalkSign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!
