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Keurig Dr Pepper May Follow Tesla to S&P 500

Keurig Dr Pepper May Follow Tesla to S&P 500

Keurig Dr Pepper Inc. could follow Tesla Inc. into the S&P 500 after becoming the biggest company eligible for index inclusion.

Shares fell 0.9% on Tuesday, the most in the Russell 1000 Soft Drinks Index, after a secondary offering by Keurig’s two largest holders priced at $28.45 per share premarket. The deal further increases the stock’s liquidity. For inclusion in the index, among other factors, a company must be highly liquid and have market capitalization of at least $8.2 billion.

With a market value of $40 billion as of Tuesday, according to data compiled by Bloomberg, Keurig now becomes the biggest company eligible for inclusion in the S&P 500. S&P Dow Jones said on Monday Tesla Inc. -- a 17-year-old company with $390 billion in value -- will be added to the gauge in December.

Keurig representatives didn’t immediately return phone and email requests seeking comment. A spokesperson for S&P Dow Jones Indices declined to comment.

Read more: Tesla Size Poses Unprecedented Challenges for S&P 500 Entry

As part of Tuesday’s offering by Keurig holders Mondelez International Inc. and JAB subsidiary Maple Holdings BV, Maple will convert a stake owned by minority holders into common stock. That increases Keurig’s public float to about 58% of total shares outstanding, Keurig said in a press release. The maker of non-alcoholic beverages had a 508.7 million-share float with more than 1.4 billion shares outstanding as of Oct. 27, according to data compiled by Bloomberg.

The offering of 60 million shares priced at a 3.4% discount to Monday’s close, the bottom of its price range. Goldman Sachs and Morgan Stanley underwrote the offering.

©2020 Bloomberg L.P.