Monster Beverage Gains Gone; Coke: No Takeover Tal
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Monster Beverage Gains Gone; Coke: No Takeover Talks
Update: Coca-Cola ( KO ) said shortly before Monday's market close that "we are not in discussions to acquire the Monster Beverage Corporation," denying a an earlier Wall Street Journal report that it's was in talks to buy out the energy drink maker. Monster Beverage ( MNST ) shares, up as much as 28% intraday, erased all its gains and closed down 0.8% to 65.
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Coca-Cola ( KO ) is in talks to move from being a distributor to owning Monster Beverage ( MNST ), the fast-growing energy drink maker, reports said.
Monster, with a market capitalization topping $11 billion, would be the biggest brand acquisition for Coke, the world's largest soft-drink maker, the Wall Street Journal reported.
Monster shares soared as much as 28% intraday on the report. They were up nearly 17% to 76.50 in afternoon trading.
For first-quarter 2012 ending in March, analysts forecast Monster's EPS climbed 30% to 38 cents, on a 25% hike in revenue, to $447.1 million.
Coke shares fell 0.6% to 76.16, and archrival PepsiCo ( PEP ) slipped 24 cents to 65.86.
Coca-Cola and Monster both initially declined to comment, and the report didn't indicate sale price or other terms.
Monster has grown in part via its global distribution agreement with Coke. But the relationship has at times been an uneasy one, with Coke taking aim at Monster earlier with its own energy drinks, like Full Throttle.
Private Rockstar, distributed by PepsiCo, could also come into play if the Monster acquisition succeeds.
The market leader is Austria-based Red Bull, whose sales have grown rapidly in part on its distinctive "Red Bull gives you wings" TV marketing campaign.
Monster started as a natural soft drinks maker, known as Hansen Natural. The report follows earlier rumors of a possible deal between the two beverage giants that surfaced after they inked the distribution pact.
For its most recent three quarters, Monster posted earnings per share growth of 29%, 22% and 35%. Sales accelerated 26%, 24% and 29% during that period.
Investors will be watching the company's earnings closely when it reports first-quarter results.
The previous quarter, it missed analysts estimates after topping in the first three periods last year. Its shares had nearly doubled in the last year prior to the merger report.
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