Teavana Soars as Starbucks Confirms Acquisition
The Atlanta Business Chronicle reported on Wednesday that Starbucks (NASDAQ: SBUX) could announce an acquisition of Atlanta-based Teavana (NYSE: TEA) on Thursday, citing a source close to the situation. As it turns out, that report was spot-on, as a deal was announced later in the day as speculation heated up.
At last check, Teavana shares were halted for news, after the stock jumped more than 27 percent to $12.88 on the rumors. The all cash deal will pay Teavana shareholders $15.50 per share for a total acquisition price of approximately $620 million. Starbucks said that it expects the deal to add $0.01 to earnings per share in fiscal 2013.
"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.
"Teavana's world-class tea authority, coupled with the romance and theater of the retail experience that is the heart and soul of Starbucks heritage, will create a differentiated customer experience and business opportunity that delivers immediate value to shareholders. This complements our existing Tazo brand and gives us the unique opportunity to create a two-tiered market position."
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