JAB Seeks Up to $2.5 Billion in Keurig Dr Pepper Share Sale

(Bloomberg) -- JAB Holding Co. is seeking to raise as much as $2.5 billion from the sale of a block of Keurig Dr Pepper Inc. shares, according to people familiar with the matter.

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A subsidiary of the investment firm backed by the billionaire Reimann family is marketing about 87 million shares for $29.10 to $29.25 each, the people said, asking not to be identified as the information is private.

The range would represent a discount of 2.2% to 2.7% versus KDP’s closing price Thursday, according to data compiled by Bloomberg. Shares of the beverage company closed at $29.91 each on Thursday.

A representative for JAB declined to comment, while a Keurig Dr Pepper spokesperson didn’t immediately respond to a request for comment.

JAB has granted the underwriter an option to purchase as many as an additional 35 million shares, according to an earlier press release announcing the offering. Separately, KDP has indicated its intention to repurchase 35 million shares as part of the offering.

After the offering, JAB will beneficially own about 21% of KDP’s outstanding common stock, according to the release.

“KDP will continue to be one of our most important investments and we expect to continue to be a long-term anchor shareholder in KDP, at or above the 20% ownership level,” Joachim Creus, Chief Executive Officer of JAB, said in the press release.

The proceeds of about $3 billion will be used to finance JAB’s recent investments in pet insurance, according to a person familiar with the situation. The KDP share sale is a one-off exercise, and JAB has no immediate plans to sell any further shares in Keurig, nor other public assets it holds, the person said.

JAB invested in Pinnacle Pet Group and Independence Pet Group since 2021, according to its website. It also bought pet insurance provider Pumpkin Insurance Services Inc. last year, tapping a market that it expects to grow organically to $2 billion in 2024, it said in a press release at the time. JAB also owns stakes in Coty Inc. and Krispy Kreme Inc.

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Morgan Stanley is the underwriter for the proposed share sale, the release shows.

(Updates with use of proceeds in eighth paragraph.)

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