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Investing.com -- Jefferies has downgraded JDE Peet’s (AS:JDEP) to “hold” from “buy” rating, saying the share price now reflects near-full value following Keurig Dr Pepper’s €31.85 per share cash offer announced in August.
The brokerage lowered its target price to €31, slightly below the offer price, citing modest deal execution risks and an expected six-month wait for closing.
KDP and JDE Peet confirmed progress in September toward their planned all-cash offer for all outstanding shares.
Both companies said they remain on track to close the deal in the first half of 2026, subject to customary conditions.
The offer memorandum is due to be submitted to the Dutch regulator (AFM) by 16 November 2025. JDE Peet’s will pay a dividend of €0.36 per share before closing, without affecting the offer price.
The offer requires a minimum of 95% shareholder acceptance, though this could be lowered to 80% if post-closing restructuring resolutions passed at JDE Peet’s Extraordinary General Meeting.
Acorn Holdings, a JAB affiliate, and key insiders control 69% of voting power and have committed to tender their shares.
The deal includes a €156.7 million fee payable to KDP if JDE Peet’s withdraws support or accepts a competing offer.
Jefferies said antitrust and shareholder approval risks appear limited. The two companies have minimal overlap, with the main intersection in the U.S., where Peet’s pod exposure is small.
Jefferies also highlighted recent market trends in Europe, noting gains for private label products amid rising prices and consumer downtrading.
JDE Peet’s experienced lower sales volumes in August and September. In those months, small changes in price had a noticeable effect on demand for its products, with demand dropping more sharply in September than in August.
Across Europe, data showed that overall demand was quite sensitive to price changes, with a 7% drop in sales volumes following a 15% increase in prices.
Jefferies said a gradual recovery in volumes would be essential to meet second-half expectations.
In its updated valuation, Jefferies set a base-case target of €31, a 1% downside from current levels. Its upside scenario was €33, and downside scenario €19, reflecting varying assumptions on growth rates, operating profit, and valuation multiples.