Three Sodastream International Ltd (SODA) Suitors That Make Sense

The silly buzz behind PepsiCo, Inc. (NYSE:PEP) buying Sodastream International Ltd (NASDAQ:SODA) has gone mercifully flat, and that makes Oppenheimer’s move yesterday — boosting its price target on Sodastream International Ltd (NASDAQ:SODA) from $68 to $85 — all that more significant.

It’s not about the takeover chatter that more often than not proves bogus. Investors should buy into a company only if they think it will eventually be worth more on its own.

SodaStream once again proved its ability to thrive as a swinging single on Monday. Whirlpool Corporation (NYSE:WHR) teaming up with SodaStream to jointly develop a carbonation system is a pretty big deal. It’s a brand stretcher. It’s validation. It’s a win-win move.

However, shares of Sodastream International Ltd (NASDAQ:SODA) somehow closed lower on the news. The stock closed lower yesterday, too, despite the Oppenheimer analyst move.

It’s pretty clear what’s happening. Speculators who hopped on expecting a PepsiCo, Inc. (NYSE:PEP) buyout at $95 earlier this month are moving on.

It’s only fair. Sodastream International Ltd (NASDAQ:SODA)’s shares soared 14% through the first two weeks of the month almost entirely on reports out of Israel claiming that PepsiCo had made a $2 billion buyout offer. The actual fundamentals at SodaStream never really improved at that time. Now that we’re seeing legitimate catalysts in the form of an analyst’s improving view and a partnership with a major appliance maker that’s being offset by the selling that follows deflated buyout buzz.

PepsiCo, Inc. (NYSE:PEP) was never going to buy SodaStream. Why would it? Why would it anger its bottlers and confuse consumers by advocating a model that would destroy its overall profitability?

No one should be surprised if someone does buy Sodastream International Ltd (NASDAQ:SODA). It just won’t be PepsiCo. That rumor was insane.

Soda suitors
Who would make more sense as a potential suitor? I’m glad you asked. I’ll go over three companies that would be far more realistic buyers, though naturally I’m not under the impression that any of these giants will go through with a deal.

Let’s start with Whirlpool Corporation (NYSE:WHR). The company behind major Maytag appliances and smaller KitchenAid appliances wouldn’t be putting out a “Powered by SodaStream” home-based beverage maker if it didn’t see the potential.

Whirlpool Corporation (NYSE:WHR) is also hungry for growth. Sales fell last year and should be flattish in 2013. Despite the housing boom that would seem to benefit Maytag appliances, growth just isn’t happening. Sodastream International Ltd (NASDAQ:SODA) would be too small to move the needle for a company with more than $18 billion in sales, but this could also be a way to diversify geographically.