Keurig Green Mountain (Coffee)
JAB Holding Company - the investment arm of the Reimann family, hiers to German consumer goods company, Joh. A. Benckiser GmbH, announced today it would buy the leading coffee pod provider in the US and make it a private again. Shares of the company were down more than 61% this year and are down from a 52-week high of $141, but the $92 a share cash offer will likely have shareholders feeling like they got a new coffee maker under the Christmas tree.
Coca Cola is particularly happy. They own a 17% stake in the company. The price per share was $92 . If I did the math right, they earned a windfall of 1.8B. Coca Cola has a market capitalization of 187.68B. 1.8B is a nice day, but it is not having a big impact on KO's shares. They are down $0.14 a share to $43.16.
What has the price of coffee done in 2015?
The price of the active futures contract is showing a 33.9% decline for the year. It is off the low of $115.75 reached on November 18, 2015 and settled today at 126.05.
On the other end of the spectrum, David Einhorn, president of Green Light Capital was scorched on a short position. The good news is that he was short at $102 per share. The bad news is the price closed on Friday at around $52 and the buy price is $92. Ouch. The fund Einhorn manages is down 20.6% through November. This news is not going to make things any better.
