SodaStream Stock Takes Aim at All-Time High on Pepsi Buyout Talk


The wild success of SodaStream International Ltd. (NASDAQ: SODA) has apparently had a predictable effect: the Israel-based company is reported to be targeted for a buyout by PepsiCo Inc. (NYSE: PEP). If the report is true, can Coca-Cola Co. (NYSE: KO) be far behind?

Since coming public in late 2010, SodaStream's share price peaked at around $78 in mid-2011 before falling back under $40. Beginning last November, though, the shares have risen steadily from $40 to close near $70 last night.

The company makes a home carbonation unit that lets consumers use ordinary tap water to make flavored carbonated beverages. The company's market cap last night was $1.43 billion, well within the reach of either Pepsi or Coke, which carry market values of around $126 billion and $181 billion, respectively.

A buyout price of say $2 billion would not be out of line, meaning SodaStream's investors would be receiving a premium of around 40%. And if other potential buyers surface, the bidding could go even higher.

Shares of SodaStream are trading up about 9% this morning, at $75.48 in a 52-week range of $31.80 to $72.38. If that number holds, SodaStream will post an all-time high today.

Filed under: 24/7 Wall St. Wire, Consumer Goods, Mergers & Acquisitions, Mergers and Buy Outs Tagged: KO, PEP, SODA