Celsius Holdings stock soars on buyout rumors
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Celsius Holdings (NASDAQ:CELH) could be a takeover target for larger beverage players like PepsiCo (PEP), according to Stifel.

In a note to clients on Thursday, equity analyst Mark Astrachan suggested the termination of PepsiCoâs (PEP) distribution agreement with Bang Energy could open the door to M&A action in the energy drink space. As PepsiCo (PEP) maintains a 5.5% market share in energy drinks via brands like RockStar, Astrachan surmised that the addition of a key partner in this space to replace Bang would stand to reason.

âWhile we have no knowledge of discussions, we think PepsiCo (PEP) could seek to acquire Celsius (CELH), the fourth largest energy drink brand with a 4.1% share,â he wrote. âDuplicating current Bang distribution, we estimate PepsiCo could double Celsiusâ (CELH) current distribution, meaningfully accelerating market share and sales growth for the brand.â

Shares of the proposed takeover target in Celsius rose over 12% at intraday highs after the rumors surfaced. While the gain cooled off slightly from that peak, the stock sustained gains of over 8% into the latter half of Thursdayâs trading session. 

Read more on why Monster Energy may be another beneficiary of Pepsiâs breakup with Bang.