SodaStream Surges on Report of Stake Sale to Starbucks

SodaStream International Ltd. (SODA) jumped the most in two years after daily newspaper Globes reported Starbucks Corp. (SBUX) is in talks to buy a 10 percent stake in the maker of home soda machines.

Shares of Lod, Israel-based SodaStream soared 14 percent to $46 at 1:25 p.m. in New York, set for the biggest since May 2012. The rally trimmed SodaStream’s loss this year to 7.6 percent.

Seattle-based Starbucks, the world’s biggest coffee chain, is in advanced talks to acquire a 10 percent stake at a company value of $1.1 billion, Israel’s Globes reported today, citing unidentified sources. An official announcement will be made soon, the paper said. Israeli newspaper Calcalist reported on April 16 that SodaStream, which has a market value of $960 million according to data compiled by Bloomberg, was in talks to sell a stake of the company.

Jim Olson, a Starbucks spokesman, declined to comment on SodaStream. Yonah Lloyd, SodaStream’s communications officer, said the company doesn’t comment on rumors.

“We are skeptical that leading beverage manufacturers would invest in SodaStream given the new at-home beverage platforms being launched,” analysts at Detwiler Fenton & Co. wrote in a note to clients today. “If anything, we fear SODA’s relevance as an at-home carbonation solution is waning as more alternatives pressure SODA’s potential.”

Coca-Cola Co. agreed to buy a 10 percent stake in Keurig Green Mountain Inc., which is developing a make-your-own, single-serve product similar to SodaStream’s, on Feb. 5 for about $1.25 billion. The announcement helped validate the do-it-yourself beverage market and fueled speculation that PepsiCo Inc., the world’s second-largest soft-drink maker after Coca-Cola, will make a bid for SodaStream.

Pepsi Partnership

Both Pepsi and Green Mountain own stakes in Sliema, Malta-based Bevyz, which introduced a rival at-home beverage maker in the U.S. last month. The company plans to sell its system in partnership with appliance maker Cuisinart, owned by East Windsor, New Jersey-based Conair Corp.

Starbucks Chief Financial Officer Scott Maw said at a March 11 conference that the company has been testing “handcrafted” carbonated sodas in the U.S. and Japan, with “fantastic” response. The company plans to sell the sodas in about a third of its U.S. stores this summer, Maw said.

SodaStream’s Chief Executive Officer Daniel Birnbaum said Feb. 26 that he expects “headwinds” to remain for the maker of soda machines after poor holiday sales prompted the company to offer discounts.

To contact the reporter on this story: Gabrielle Coppola in New York at gcoppola@bloomberg.net

To contact the editors responsible for this story: Nikolaj Gammeltoft at ngammeltoft@bloomberg.net Marie-France Han

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