BRVO.OB

[AustinPowers]

So if I am understanding this correctly, the base price for BRVO should be at least $1.20 per share which is a premium to where the share price closed today.  Is this a done deal?  Am I interpreting this correctly? 

So all of these shares traded down to these levels based on a misunderstanding of the information?   

[yuyjust]

I'm sorry but correct me if I'm wrong. I don't know much about this kind of transaction but should we be worry about how much CCE is willing to pay for their shares. They are not buying all our shares right ?

[AustinPowers]

 I know there are some financial wizards here that will make sense of all this.  I appreciate the copy from the Raging Bull board, but that is not actual copy from the puposed Lehman report.  It would be great if someone has access to that report to copy from    There seems to be alot of confusion about this deal and it is not only reflected on the boards, but also by the trading activity.

One would think that this is very good for the company but hopefully not at the expense of the shareholders.

[The Bad Guy]

Copy from RB post by aitech61

Lets play with the numbers...

Now remember the the PR the other day for NHRA and the Cagnazzi Racing team. The PR referenced the following:
announced the launch of a new promotional program in the $2 billion single-serve, flavored milk industry with Cagnazzi Racing.

2 billion single-serve milk industry... Now lets talk market share... The goal of BRVO is to get as I have said in many a message before 1) Market awarneness and 2) Distribution......

Now with Cokes market awareness and distribution support, if BRVO could crack a mere %15 of market share. This would reflect revenues in the range of 300 million dollars. Lets say they can operate at a margin of 30% we can see 90 million in net earnings... Now with 219 million shares outstanding after the 69 million present o/s + 69 million coke options exercised and the following 81 million shares purchased by coke, we have 90 million / 219 million we have an earnings per share of 41 cents. Now using a growth p/e of 30 we have a potential share price value of 12.30.....

This is all on 15 percent market share.... Now with Cokes distribution capability and Bravos awesome products we could see 25%. That figures to a shareprice of 20.70... See what I mean.... Possibly margins can be adjusted to reflect more earnings.. I honestly think that the 2 billion number will go up with the focus now targeting more healthy drinks versus soda... It is all exponential at this point....

Just take a look at energy drinks. A couple of years ago they were where milk is today. I can see in 2 years from now, flavored milk being the BIG item and fad. That is where we could see who knows a 4 billion market versus 2 billion market. In that case double each of my scenarios... Get what I mean!!! $5 is a no brainer..... From there you can see the growth potential......

We are $1 today. Who knows. We could be $20 a year from now... We could be $40 two years from now. It definitley has possibilities more real today than yesterday!!!!!!!!!!

This is where your disciplines need to take over if you want to be one of the few that get in today to reap the major rewards 1 or 2 years from now!!!!!!

[la-onda]

Reuters update:
Thu Jul 14, 2005 12:54 PM ET

(Recasts, adds reaction, background, changes dateline from previous CHICAGO)
By Paul Simao

ATLANTA, July 14 (Reuters) - Coca-Cola Enterprises Inc. (CCE.N: Quote, Profile, Research) said on Thursday it had acquired options to buy a minority stake in Bravo! Foods International Corp. (BRVO.OB: Quote, Profile, Research) , the first step in a bid to take control of the U.S. flavored milk producer and boost the soft drink bottler's share of the market for nutritional beverages.

Coke Enterprises, the world's largest bottler of Coca-Cola products, said it would exercise the options, which represent about 23 percent of Bravo's common stock, if Bravo was willing to sell it enough additional shares to raise its stake to more than 50 percent.

The bottler also said the transaction was dependent on its negotiations for distribution rights to Bravo's products, which include Slammers Ultimate Milk and cross-promotional brands with Masterfoods and Marvel Comics.

Bravo's shares fell 6 cents, or 5 percent, to $1.14 in midday trading on the over-the-counter board. Shares of Coke Enterprises, about 37 percent owned by Coca-Cola Co. (KO.N: Quote, Profile, Research) , were up 7 cents to $22.05 on the New York Stock Exchange.

"It is anticipated that CCE's total investment would be approximately $38 million upon exercise of the options and the purchase of common shares from Bravo," Coke Enterprises said in a filing with the Securities and Exchange Commission announcing the transaction.

The options expire on Aug. 31, 2005.
The play for Florida-based Bravo, which has markets in the United States and more than a dozen other countries, is the latest foray by the Coca-Cola system into flavored milk, a product that tends to appeal to kids and adolescents.
Coca-Cola already markets Swerve, a dairy drink that comes in a variety of flavors and contains more than 50 percent dairy products, allowing it to carry the "Real" seal of the American Dairy Association.
But the Atlanta-based soft drink giant and its partners face stiff competition from Britain's Cadbury Schweppes Plc (CBRY.L: Quote, Profile, Research) and Purchase, New York-based PepsiCo Inc. (PEP.N: Quote, Profile, Research) , which already sell similar products.
Cadbury Schweppes markets a chocolate dairy drink called Yoo-hoo. PepsiCo sells a variety of Frapuccino drinks in collaboration with Starbucks Corp. (SBUX.O: Quote, Profile, Research) as well as a chocolate milk drink under the name Love Bus Brew.
"The category is very small, but in an era of health and wellness focus it has larger potential," said John Sicher, editor of Beverage Digest, an industry newsletter.
Flavored milk has gained traction in the United States amid a move by consumers to healthier products. Health critics have linked sugary soft drinks to rising levels of obesity and diabetes.
On Wednesday, the Center for Science in the Public Interest, a U.S. consumer group, called for cigarette-style warnings on soft drinks to alert consumers to the health risks of overconsuming such products. (Additional reporting by Emily Kaiser in Chicago)

[David Randolph]

Trying to make sense of the deal between BRVO and CCE:

1) The deal is not done yet. CCE has options to buy 69,000,000 BRVO shares from 12 shareholders at price $0.36.

2) CCE wants to buy an additional 81,000,000 shares from BRVO, giving CCE a total of 150,000,000 shares of BRVO, that is, more than 50% of the company.

3) In addition to this, the two companies are making a distribution agreement for the sale of Bravo! Foods' products in the United States and its possessions, and internationally in Canada, Belgium, France, Great Britain, Luxembourg, Monaco and the Netherlands.

4) CCE said it is planning to invest about $38M on this deal with BRVO. This value is too low in my opinion, but it doesn't seem CCE is trying to make an hostile takeover, because they are friendly making that distribution agreement.

5) 69,000,000 shares at price $0.36 will cost CCE $24.84 million.

6) They're left with just $13.16M to buy the additional 81,000,000 shares. So the cost per share seems to be about $0.17.

7) BRVO will issue a lot of new shares to make this deal. The number of shares outstanding will grow from 63.49 million to 213.49 million shares.

8 ) At $1 a share the company will be worth $213.49 M. The market cap was just about $65M prior to this deal.

9) The deal with CCE will make sure the expectation I had for BRVO to sell worldwide is now almost a sure thing in the future. But with the stock at $1 - $1.10, the market is already reflecting that, I believe.

10) The company will gain a lot of growth potential from the deal. But the stock price won't, because of the dilution effect. On Wednesday, $1 change in BRVO's stock price was «worth» $63.49M. After 31 August, if this deal is completed (and there's no reason to believe it won't be), $1 change in the stock price will be worth $213.49M

11) I'm no accountant and I'm not sure if these thoughts are right.

12) I have a 55% profit at yesterday's close (337.5% profit since my first purchase), and many doubts.

13) In doubt, stay out.

14) I will sell BRVO at today's open and wait to get a more clear picture of this deal, which looks like will be very good for the company, but not so good for shareholders.

15) Remember BRVO was a $0.10 stock just 4 months ago.

Stocks come and go, and there will be plenty of opportunities in the future. I'm not sure if I'm right or wrong in being short term bearish on BRVO, but I'm sure of what I have to do to respect my speculating strategy and ensure my financial prosperity. And that is, in doubt stay out. I'll take the money and run, hope everyone makes the right decision (knowing this is impossible).

Good luck !

[AussieTrader]

I wasn't around for yesterdays news release, but seems to be a sell the news deal for sure

[atalltexan]

I'm out, following David's advice.  Appears to be freefalling now.

[stocky]

Out

And this shows that fundamentals does have a big time impact. And what I can read from daves comments above, it seems like BRVO has to be at one third the yesterday's closing to be at the same level to account for the extra shares.

[OhadOnFire]

Guys,

Did David update all his 3SF stocks? - i see only part of them.

Thanks!
Ohad

[fill_the_gap]

I see this deal in a different light.

In fact, added at .88.

With Coke involved, the International marketing and distribution will value the market cap in line with the price.

What you see today is panic selling.  Will be choppy for awhile then consolidate and move up.

My opinion is that BRVO was a buy before Coke.  The company will now have exponential growth.  Coke needs to get into this market in a huge way.

Buying more and will hold for a huge gain from this level.

Just an opinion.  Tend to do opposite of the public when they are in a frenzy.

-Jeff-

[slomo007]

I see this deal in a different light.

In fact, added at .88.

With Coke involved, the International marketing and distribution will value the market cap in line with the price.

What you see today is panic selling.  Will be choppy for awhile then consolidate and move up.

My opinion is that BRVO was a buy before Coke.  The company will now have exponential growth.  Coke needs to get into this market in a huge way.

Buying more and will hold for a huge gain from this level.

Just an opinion.  Tend to do opposite of the public when they are in a frenzy.

-Jeff-

Couldn't agree more....I've added 3 times over the past 2 days.  Nothing to worry about, IMO.

[David Randolph]

No, I'm sorry, I've started the usual update and then stumble at BRVO. I wasn't sure of what to think, so I went on doing other stuff I had to do (go to the bank, take care of other businesses), and then I was out of time to update all holdings.

Hopefully in the future I'll become a professional at 3SF and work full time on this loving website. In the meantime I'll do what I can ...

But tonight I'll update all holdings again (I'm not selling or buying any, beside of BRVO which I've sold @$1.055). In the weekend I will order some accounting and financial books from Amazon, yesterday it could be clear the stock was a sell as the news came out, but unfortunately I'm no accounting expert (I was a futures trader and rules in my country for listed companies are much different than in the US). But I will be, join me in this learning process 

Good luck !

[fill_the_gap]

Depends on the philosophy.
As far as the concept of this site.  Stocks On Fire...
BRVO probably is a sell.

But BRVO is a buy and hold for those with some time.

Already nice gain on the purchase today.

My target for BRVO with Coke involved is actually higher now.
They will take it to another board with the marketing, IMO.
$ 5.00 and above.  Who knows how long.
Coke was the ideal candidate to get involved.

Very confident here as I was with my original HISC posts.

Give it a little time to sort out.  You will make more here by holding than trading in and out of other stocks.  We know the history and chart.  But if you want On Fire...Okay to move on.

Very strong buy at this level. 

-Jeff-

[David Randolph]

Yes, I agree with fill_the_gap the company will continue to grow a lot in the future. But BRVO shareholders won't be very benefited as before (CCE will be the big gainer, I believe). BRVO will come out much heavier from this deal, without any appreciation in the share price. It will move more slowly, each rise will represent a bigger value.

But there's no doubt this company has a bright future (this partnership with CCE makes sure it will be bright).

Longer term I believe it will be a good investment, just unsure if I won't see $0.60 before $2, so I sold. Perhaps in the future I'll come back in, even at a higher price, I don't mind that.

Good luck to all !