The Burlington, Mass., company hopes to draw more passive investment funds with the move, knowledgeable sources told Bloomberg.
Keurig’s $42 billion market cap would earn it a spot in the Nasdaq 100 index, Bloomberg reports. That’s an index plenty of passive funds replicate.
In addition, Keurig’s biggest shareholder, JAB Holdings, will reallocate about $2 billion of its Keurig shares to its own investors, including banker Byron Trott’s BDT Capital Partners, Bloomberg’s sources said.
JAB holds just under 50% of Keurig through Maple Holdings.
It will also send shares to Quadrant Capital Advisors, which is managed by Colombia’s billionaire Santo Domingo family, Bloomberg reports.
Quadrant will join BDT in the ranks of Keurig’s largest direct shareholders, the sources said. They said the actions could be announced this week.
Morningstar analyst Nicholas Johnson has a mixed view of Keurig.
“The merger of Keurig Green Mountain and Dr Pepper Snapple into Keurig Dr Pepper has created a North American beverage behemoth with strong brands and supply-chain positioning,” he wrote in a July 31 commentary.
“Despite being only one-third and one-sixth the size of Coke (KO) - Get Report and Pepsi, (PEP) - Get Report respectively, we think Keurig Dr Pepper is poised to augment the positioning of its cold business (60% of sales).
"It should, however, have a more difficult time navigating various structural headwinds plaguing its hot business.”
Johnson puts fair value for Keurig at $27.
The shares at last check were off 2% at $28.94. They were up 2% in 2020 through the close of trading Friday.