Saturday, August 22, 2009

DPS Bottling Bonanza?

Bloomberg posted a story yesterday entitled "Dr Pepper Snapple Evaluating Distribution Contracts"

Apparently, DPS gets to renegotiate the bottling contracts it has with Pepsi Americas and Pepsi Bottling Group. These are the two (2) bottlers Pepsico just bought. There is a "change of control" clause in the bottling contracts.

A Goldman Sachs analyst is quoted saying a sale of the contract rights could yield $2.5 billion or more for Dr. Pepper. With a sub-$7 billion market value, you can understand why this figure caught my attention.

I don't know how realistic this figure is or how it was calculated, but it is not included in my previous valuation.

It is yet another reason to consider Dr. Pepper Snapple Group (DPS) for your portfolio.

No comments:

Post a Comment