Market Overview

Morgan Stanley Ponders Coca-Cola Buying Stake In Monster Beverage

Related MNST
UPDATE: Stifel Raises Price Target On Monster Beverage On Updated 2015-2017 Estimates
Bank Of America Downgraded Dr Pepper Snapple; What's Another Hot Beverage Name?
Making Money With Charles Payne: 12/8/14 (Fox Business)

In a report published Friday, Morgan Stanley analyst Dara Mohsenian reiterated an Equal-Weight rating on Monster Beverage (NASDAQ: MNST).

In the report, Morgan Stanley noted, “KO announced plans to acquire a 16.7% stake in MNST (on the media call Coke indicated it has an option to increase its stake to 25% with a four-year standstill above the 25% level) – and will appoint two directors to Monster's board.

"Under the terms: (1) KO will receive a 16.7% post-deal stake as MNST issues shares, (2) MNST will receive a net cash payment of $2.15B, (3) KO will transfer its global energy portfolio, including Burn, NOS and Full Throttle, to MNST, which is a concentrate business, (4) MNST will transfer its non-energy business to KO, which is much smaller in size than Coke's energy portfolio, and (5) MNST will enter into expanded distribution agreements with the Coke system.

"KO and MNST will expand their current US/Canada distribution, with the KO system becoming MNST's preferred distribution partner globally. The companies expect the transaction to close in late CY14 to early CY15 and Coke will use equity method accounting. These are our initial thoughts, with pending detail on the Friday AM conference call.”

Monster Beverage closed on Thursday at $71.65.

Latest Ratings for MNST

Jan 2015JefferiesMaintainsHold
Jan 2015Stifel NicolausMaintainsBuy
Jan 2015Wells FargoDowngradesOutperformMarket Perform

View More Analyst Ratings for MNST
View the Latest Analyst Ratings

Posted-In: Dara Mohsenian Morgan StanleyAnalyst Color Reiteration Analyst Ratings


Related Articles (MNST)

Around the Web, We're Loving...

Get Benzinga's Newsletters