US: Hansen Natural shares jump on Coca-Cola rumour
Shares in Hansen Natural have leapt in price following reports that the beverage group is in talks with Coca-COla over a possible distribution agreement.
Hansen's share price rose 17% today (19 September) to US$27, upons reports that it may sign a deal allowing Coca-Cola to distribute its Monster energy drink.
If confirmed, the move would be a further sign that Coca-Cola is actively seeking a greater presence in the energy drink sector.
Analyst Mark Astrachan, of Stifel Nicolaus & Co, said in a note yesterday: "We view the news as positive and believe Coke's potential interest in Hansen stems from Monster Energy's continued success in gaining market share in an energy drink category that continues to grow."
Hansen itself reported last month that the US energy drink sector had been affected by the "challenging macro economic environment" in the US.
However, Astrachan said that, while Coke's own Full Throttle and PepsiCo SoBe brands may have suffered, "Red Bull and Hansen continue to grow in excess of the overall category and have taken meaningful market share in the last 12 months".
He added: "We expect this trend to continue and note that Red Bull and Hansen currently account for nearly 2/3 of the overall energy drink market by volume."
Neither Hansen Natural nor Coca-Cola were immediately available for comment.
Separately, it emerged this week that Hansen faces a class action lawsuit in its home state of California. Law firm Scott & Scott announced that it had filed for proceedings against Hansen, accusing the group of "materially false and misleading statements regarding the company's beverage sales and financial results".
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