Keurig Dr Pepper shares fell about 6.4% on Thursday after the coffee and soft drink company said it plans to sell $2 billion of new stock to pay down debt. The stock traded at $35.80 at 2:30 p.m. Eastern time, down $2.45 from Wednesday’s close of $38.25, its highest close in a year.
In a preliminary prospectus filed with the Securities and Exchange Commission before the market opened, the company said it will use the money, together with cash on hand, to repay or buy back about $2 billion of debt. It has given the underwriters, led by Goldman Sachs and Morgan Stanley, the option to buy up to $300 million more in shares. The price of the new shares had not been set in that filing.
Selling new shares means each existing share represents a smaller piece of the company.
Keurig Dr Pepper said the repayment would lower its debt, net of cash, to 3.8 times a year of adjusted earnings, from 4.1 times as of Sept. 30. The company plans to split its soft drink and coffee businesses into two separate public companies, which it expects to happen in early 2027.
…
That’s the story. … Thank you for listening to Cedar Global Markets. We’re supported by our partners, and you can learn more about the partner featured on this page. We’ll see you next time.
