(Corrects throughout to say Coke is yet to increase its stake,
removes reference to value of stake)
May 13 Coca-Cola Co will raise its stake
in Keurig Green Mountain Inc to 16 percent from 10
percent, which will make it the largest shareholder of the maker
of the popular Keurig one-cup coffee brewer.
Keurig's shares jumped 10 percent to $121.79 in morning
trading on the Nasdaq. Coke's shares were up 0.9 percent at
$41.20 on the New York Stock Exchange.
Under an accelerated purchase agreement with Credit Suisse,
Coke will own about 26 million shares of Keurig, up from 16.7
million as of Feb. 27, according to a regulatory filing. (link.reuters.com/qak39v)
"These incremental purchases demonstrate our continued
belief that Keurig Green Mountain has substantial growth
potential," Coke said in an emailed statement.
Coke and PepsiCo Inc have been struggling with
declining soda sales in developed markets such as the United
States as consumers become more health conscious.
Under a 10-year agreement announced in February, Coke and
Keurig are developing a machine that will serve both carbonated
and non-carbonated drinks.
Keurig's machines use pods filled with coffee, tea or hot
chocolate powder to brew one-cup drinks at home.
Coke said in February it had bought a 10 percent stake in
Keurig for $1.25 billion, with the option to raise its holding
to a maximum of 16 percent through open market purchases.
Up to Monday's close, Keurig's shares had risen about 38
percent since Coke disclosed its initial stake.
Short interest in Keurig's shares had dropped to 8.7 percent
as of April 30 from 22 percent at the end of January before the
Coke deal was announced.
(Reporting by Maria Ajit Thomas in Bangalore; Editing by