logo
  Join        Login             Stock Quote

Starbucks (SBUX) To Buy Loose-Leaf Teas Retailer Teavana (TEA) For $620M

 November 14, 2012 03:22 PM
 


(By Balaseshan) Starbucks Corp. (NASDAQ: SBUX) said it has agreed to buy specialty loose-leaf teas retailer Teavana Holdings Inc. (NYSE: TEA) for about $620 million in cash. Following the news, shares of TEA jumped more than 52% in regular trade.

Teavana stockholders of record will receive $15.50 per share in cash, representing a 53% premium from Tuesday's closing price. The merger will result in Teavana becoming a wholly-owned subsidiary of Starbucks.

Starbucks expects the acquisition to be accretive to earnings by about $0.01 per share in fiscal 2013, based off of the previously announced earnings targets. Stockholders of Teavana holding about 70% of the outstanding common shares have approved the merger agreement by written consent.

[Related -Chipotle Mexican Grill, Inc. (CMG): This High-Flying Stock Could Tumble 50%]

"We believe the tea category is ripe for reinvention and rapid growth. The Teavana acquisition now positions us to disrupt and lead, just as we did with espresso starting three decades ago," said Howard Schultz, Starbucks chairman, president and CEO.

Just as Starbucks pioneered a new retail experience for coffee and espresso, the company's acquisition of Teavana provides the opportunity to do the same within the rapidly growing $40 billion global tea category

Together, Starbucks and Teavana will jumpstart the next wave of growth in this dynamic category, leveraging Starbucks core competencies of real estate, design and store operations and integrating these with Teavana's world-class tea authority, global sourcing capabilities, merchandising and best-in-class retail store unit economics.

[Related -For Maximum Total Return Go For Growth]

Powered by Starbucks existing infrastructure, Starbucks plans to continue to grow and extend Teavana's already-successful 300 mall-based stores as well as add a high-profile neighborhood store concept that will accelerate Teavana's domestic and global footprint. The closing is expected to occur by year end, following receipt of regulatory clearances.

TEA is trading 52.47% higher at $15.44 on Wednesday, while SBUX trades down 2.01% at $49.30.

iOnTheMarket Premium
Advertisement

Advertisement


Post Comment -- Login is required to post message
Name:  
Alert for new comments:
Your email:
Your Website:
Title:
Comments:
 

rss feed

Latest Stories

article imageRussell 2000 Showing Relative Weakness at the New Highs

A quick “Quad Index” Grid shows us that the small-cap Russell 2000 is showing relative strength to the read on...

article imageThe Poster Boy For Liberal Economics Discovers The Tax Factor

Paul Krugman seems to be having a supply-side-economics moment… sort of. Raising taxes, the NY Times read on...

article imageMacroprudential Policy And Distribution Of Risk

There is very little doubt that housing prices and leverage played a strong role in the global financial read on...

article imageIs the World Turning Japanese?

Many really think so, but reality suggests read on...

Advertisement
Popular Articles

Advertisement
Daily Sector Scan
Partner Center



Fundamental data is provided by Zacks Investment Research, and Commentary, news and Press Releases provided by YellowBrix and Quotemedia.
All information provided "as is" for informational purposes only, not intended for trading purposes or advice. iStockAnalyst.com is not an investment adviser and does not provide, endorse or review any information or data contained herein.
The blog articles are opinions by respective blogger. By using this site you are agreeing to terms and conditions posted on respective bloggers' website.
The postings/comments on the site may or may not be from reliable sources. Neither iStockAnalyst nor any of its independent providers is liable for any informational errors, incompleteness, or delays, or for any actions taken in reliance on information contained herein. You are solely responsible for the investment decisions made by you and the consequences resulting therefrom. By accessing the iStockAnalyst.com site, you agree not to redistribute the information found therein.
The sector scan is based on 15-30 minutes delayed data. The Pattern scan is based on EOD data.