Starbucks and teavana Free Essay Example, 1000 words

This liquidity is desirable on the part of Teavana, who may in turn do anything it wants with the money. The shareholders are not tied to Starbucks in any way after the deal closes, because of the cash nature of the transaction. Given this liquidity, Starbucks has additional leverage in haggling for a lower purchase price, as compared to if the deal was arranged as a stock swap, or as being paid for by a combination of equity as well as debt. The idea is for Starbucks to leverage the liquid, all-cash nature of the intended purchase to sweeten the terms and to make sure that is is able to get the biggest concession/discount possible for any purchase price negotiation (Hedges, 2013; Sherwin, 2013; Weiss and Hughes, 2014; Baertlein and Geller, 2012; Ashworth, 2012). The liquid position of Starbucks is a leverage that can be tapped to negotiate for the best price for the acquisition/merger, and as discussed above, it can certainly be used to lower the price for the deal. At the same time, that Starbucks is also bringing to the table its excellent brand and operations, and its wealth of experience developing a global presence for its products and its stores. We will write a custom essay sample on Starbucks and teavana or any topic specifically for you Only $17.96 $11.86/page