On the Street: Keeping up with Jones
March 23/Market News Publishing -- Reed's Inc. announced that Jones Soda Inc. has received an unsolicited offer by a third party and has terminated the exclusivity provision of the letter of intent (LOI) signed with Reed's Inc. on March 9, 2010.
As stated in the LOI, Reed's Inc. had come to mutual terms with Jones to acquire the company for approximately $9.8 million in cash and stock. On March 19, 2010, Jones informed Reed's that it received an unsolicited proposal that it would like to pursue while continuing to have discussions with Reed's Inc.
Chris Reed, founder, chairman and CEO of Reed's Inc., stated, "Jones management has a fiduciary responsibility to its shareholders to consider any offers to buy the company, and we respect that. As of yet, we have not seen the terms of the new offer. However, I would like to reiterate that our offer is based mostly on stock, which has not yet reflected the value of the post-merger company. The post-merger Reed's Inc. would be worth more than the two companies alone due to the significant cost savings associated with the consolidation of operations. While both companies have struggled with profitability over the past few years, the combined entity would most probably not. Reed's Inc. should be profitable in 2010 even without this merger."
Reed concluded, "The merger with Jones is not a necessity for Reed's, as our business is healthy and picking up momentum on all fronts. We reiterate our guidance for double-digit growth in 2010, and we will continue to look for other opportunities for synergistic acquisitions in the course of building our business."
From the March 29, 2010, Prepared Foods E-dition