Hansen shares up on Coke distribution talks report

BANGALORE, Sept 18 (Reuters) - Hansen Natural Corp (HANS.O) is in talks with Coca-Cola Co (KO.N) for a distribution agreement, an analyst said, citing industry publication Beverage Business Insights, and the energy-drink maker's shares rose as much as 23 percent.

California-based Hansen, which makes the Monster energy drink, is trying to gain a foothold in markets outside the United States, and may benefit from a distribution deal with Coca-Cola given the No.1 soft drink maker's significant international presence.

"We view the news as positive and believe Coke's potential interest in Hansen stems from Monster's continued success in gaining market share in an energy-drink category that continues to grow," Stifel Nicolaus & Co analyst Mark Astrachan wrote in a note to clients.

Given that Hansen continues to benefit from a distribution relationship with U.S. brewer Anheuser-Busch Cos Inc (BUD.N), it is likely the company will utilize both distribution systems, the analyst said.

Hansen Natural did not immediately respond to a call seeking comment. A spokesman for Coca-Cola was not immediately available for comment.

Stifel's Astrachan said the discussions between the companies confirm his view that slowing growth in the energy-drinks segment is more a function of declining trends for energy-drinks marketed by Coca-Cola and Pepsi rather than the overall health of the category.

Hansen and its main rival in the energy drinks market, privately held Austrian company Red Bull, together account for nearly two-thirds of the volume in the overall energy-drink market, Astrachan said.

Shares of the company were up $3.77 at $26.88 in midday trade Thursday on Nasdaq. They hit a high of $28.50 earlier.

Coca-Cola shares were up almost 1 percent at $53.05 on the New York Stock Exchange. (Reporting by Dilipp S. Nag and Vikram Subhedar in Bangalore; Editing by Pratish Narayanan)