Boston, MA 04/16/2014 (wallstreetpr) – Giant maker of home soda machines, Sodastream International Ltd (NASDAQ:SODA), continues to surge in early intraday trading session at the back of a Calcalist report that indicates it is in talks with a large soft drink producer on a possible minority stake sale.
Sodastream Valued at $1.1 Billion
Its shares are already at a high of $40.68 after surging by 7.92%. It is being reported that Sodastream is in negotiations to offload between 10 to 16% of its holding at a share price of $52. This essentially values the company at $1.1 billion.
The Calcalist report also reports that the suitor will be given an opportunity to increase stakes with a view of becoming the majority shareholder. The news comes at the back of Sodastream experiencing a straight quarterly rot in the market as sales continue to drop.
Sodastream International Ltd (NASDAQ:SODA) shares have tumbled by a high of 12% on a year over year basis, creating the longest streak of quarterly declines. According to analyst’s estimates, the company’s sales are inline to grow by less than half, the high of 29% that was registered in 2013. Poor holiday season sales had prompted the company to introduce discounts as a way of encouraging sales.
New Arrivals Mounting Pressure
New Arrivals in the industry continues to mount increased pressure on the company’s sales with Pepsi not aiding the situation by investing in a company producing rival machines. Sodastream has indicated plans to place its products in new locations especially in grocery stores, as a way of bolstering sales.
Chief corporate and communications officer, Yonah Lloyd, is optimistic that the company will attain its turnaround in the market having corrected most of the issues that resulted in increased costs, in the fourth quarter.
Sodastream has already reported earnings that missed analyst’s estimates although they have consequently rebounded on news that larger rivals like Coca Cola and PepsiCo Inc. Could be planning to enter into the space. Entrance of key players could help Sodastream increase the sale of its home soda appliances.
Sodastream International Ltd (NASDAQ:SODA) growth will be limited if does not enter into a partnership with industry giants like Coca Cola Company (NYSE:KO) or PepsiCo Inc. (NYSE:PEP).
