Keurig, which has tried everything else, tries selling itself for $14 billion

JAB Holding is offering $92 for each share of Keurig, a 78 percent premium from the stock’s closing price of $51.70 on Friday.

In a move shocking to many investors, Keurig Green Mountain announced on Monday, December 4th that it has agreed to a $92 a share buy out from an investor group led by JAB holdings.

JAB Holding Co.’s buyout of Keurig Green Mountain Inc. helped save Coke from losing $1 billion on its $2.35 billion investment in the single-cup coffee company.

JAB is acquiring Keurig Green Mountain in partnership with strategic minority investors who are already shareholders in Jacobs Douwe Egberts, including Mondelēz worldwide and entities affiliated with BDT Capital Partners. The group also owns a majority stake in the luxury shoe brand Jimmy Choo. “For first quarter shipments for us, I’d say, we’re very confident that we should see a higher retail sales for brewers compared to the prior year”, said Peter Leemputte, Keurig’s chief financial officer. Its stock had lost more than 60 percent of its market value this year up to Friday’s close.

Keurig has stumbled over the past year.

Then, in October, Keurig rolled out Keurig Kold in New York City, a touch-button cold drink maker selling for $370 that debuted to a great deal of skepticism among analysts and consumers, who cited the cost of the machine and of the pods. Mondelez now has a 43.5% stake in Jacobs Douwe Egberts B.V. and expects its stake in that venture will fall to about 26.5%, with its stake in the new joint venture to be somewhat lower.

“It is a fantastic company that uniquely brings together premium coffee brands and new beverage dispensing technologies like the famous Keurig single serve machine”, Becht said.

David Einhorn can’t catch a break on Keurig Green Mountain Inc. In late 2012, investors had shorted as much as 29 percent of the outstanding shares in Keurig.

Indeed, Monday’s rally for Keurig, which saw its shares jump almost 72%, marking its largest one-day gain in its history, proved a fortunate pop for Coke. In 2006, Keurig was acquired by Green Mountain in a deal valued at $160 million.

Keurig Green Mountain, which makes K-cups single-serve coffee pods, said it has accepted a $13.9bn (£9.2bn) bid.

“The Coca-Cola Company is fully supportive of this transaction”, said Muhtar Kent, the chairman and CEO of the Coca-Cola Company.

JAB said it would operate Keurig (GMCR) as an independent subsidiary based in Waterbury, Vermont. Sales of its machines fell 23 per cent to $632.6 million in the same period.

Shares of the company were halted. Sales of single-serve capsules, delivered by machines made by Keurig and Nestle’s Nespresso unit, are rising at more than twice that rate.