Keurig Dr Pepper (KDP) has stated that a subsidiary of JAB Holding Company plans to sell an aggregate of 86,956,522 KDP shares through a secondary offering.
JAB also granted an option to the underwriter, Morgan Stanley, to purchase up to an additional 13,043,478 shares within the next 30 days.
According to Bloomberg, JAB is selling the block of shares for $29.10 to $29.25 each, potentially generating up to $2.5 billion for the company. This pricing reflects a discount of 2.2% to 2.7% compared to KDP’s closing price on February 29, 2024, which was $29.91 per share.
CEO of JAB Joachim Creus said, “The proceeds from our sale of KDP shares allow us to maintain our leverage target in line with our financial policies, as we continue to build out our investment portfolio. KDP will continue to be one of our most important investments and we expect to continue to be a long-term anchor shareholder in KDP, at or above the 20% ownership level.”
Continue Exploring: Diageo’s Captain Morgan unveils exciting line of RTD cocktail-inspired malt beverages!
Following the completion of the transaction, assuming full exercise of the underwriter’s option to purchase additional shares, JAB will own around 21% of KDP’s outstanding common stock, bringing KDP’s public float to approximately 79%.
KDP has stated that several of its directors and officers have expressed interest in acquiring the shares. As per the transaction terms, the remaining shares held by JAB will be bound by a 180-day lock-up agreement with Morgan Stanley.
A lock-up period restricts the quantity of shares that can be sold within a specified timeframe, which in this instance is 180 days. These periods commonly pertain to insiders, encompassing a company’s founders, owners, managers, and employees, but may also involve early investors like venture capitalists.
According to a knowledgeable source, JAB intends to utilize the funds to support its recent ventures in pet insurance. Additionally, the source noted that the sale of KDP shares is a singular event, with JAB currently having no imminent intentions to divest further shares in KDP or any other publicly held assets.
Continue Exploring: Japanese beverage giant Kirin Holdings to invest $25 Million more in B9 Beverages
