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Nov 20 Teavana Holdings Inc, which is set to be acquired by Starbucks Corp, issued a statement on Tuesday rebutting a research report from a short seller that said its teas have pesticides in amounts that exceed regulatory limits.
The report, issued on Tuesday by investment firm Glaucus Research Group California LLC, said Glaucus had Teavana teas independently tested and that they contained pesticides that exceeded United States and European Union regulatory limits.
Teavana shares fell 76 cents, or 5 percent, to $14.67 on the New York Stock Exchange. Starbucks shares were up 0.3 percent at $49.91 on the Nasdaq.
Teavana, which sells loose-leaf teas and tea-related merchandise, said its teas undergo rigorous testing based on international food safety standards.
It pointed out that Glaucus was a short-seller that may benefit from the allegations made in its report.
Glaucus made no secret of its bias.
"We are biased ... obviously we will make money if the price of Teavana stock declines," the company said in its report. "Just because we are biased does not mean we are wrong."
Glaucus said it thought lawsuits would be forthcoming and Starbucks would eventually abandon its agreement to acquire what it called a "tarnished consumer brand".
Starbucks spokeswoman Lisa Passe said the company was acting in accordance with its merger agreement.
"We will assess developments that occur as warranted but beyond that I am not going to speculate," Passe said.
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