Sodastream International Ltd (SODA) Negotiating Sale Of 16% Stake

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Sodastream International Ltd (NASDAQ:SODA) may be in the early stages of negotiations to sell a 10% to 16% stake to a major soft drink maker, according to the Israeli publication Calcalist. The website states that the potential deal values Sodastream at approximately $1.1 billion. That would be a significant premium on Tuesday’s closing price.

There is significant short interest in Sodastream International Ltd (NASDAQ:SODA), with over a third of its stock being sold short, according to Reuters. Currently the two parties are said to be held up in making a deal by differences in the type of the deal they would do.

Speculations about Sodastream’s potential partners

According to Calcalist, the interested investor wants to receive the option to raise its stake in Sodastream International Ltd (NASDAQ:SODA) with the purpose of acquiring the entire company in the future. Of course there’s plenty of speculation about which companies may be potential suitors, including PepsiCo, Inc. (NYSE:PEP), Starbucks Corporation (NASDAQ:SBUX) and Dr Pepper Snapple Group Inc. (NYSE:DPS).

According to Bloomberg Businessweek, PepsiCo, Inc. (NYSE:PEP) is seen as the leading possibility because The Coca-Cola Company (NYSE:KO) recently bought a 10% stake in Keurig Green Mountain Inc (NASDAQ:GMCR). Coke’s goal in that partnership was to develop a new machine for making cold drinks which could be similar to Sodastream’s machine.

If Pepsi wants Sodastream

If Pepsi does turn out to be the company Sodastream International Ltd (NASDAQ:SODA) is speaking with about a stake purchase, then Monness Crespi Hardt & Co. analyst Jim Chartier believes Sodastream will see an increase in household penetration.

PepsiCo, Inc. (NYSE:PEP) CEO Indra Nooyi said in February that they were seeking to expand in in-home carbonation, seeing it as “another distribution channel,” and saying that they were “working with multiple people” in choosing a good partner for the product. Also last June, Pepsi was said to have offered to buy Sodastream International Ltd (NASDAQ:SODA) for $2 billion, although later the soft drink maker said that report wasn’t true. Then in February, the rumors of a deal with Pepsi resurfaced again.

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