Move over Exxon Valdez, if Colombian Coffee Federation Director Gabriel Silva has his way, you’ll soon be introduced to the Starbucks Valdez; however, unlike the boat, the latter just doesn’t hold water.
In an interview published Sunday, the federation director said:
“I am going to propose to my colleagues that we chip in to buy Starbucks. This will reinforce our fight to defend coffee origins,” Silva said. “What I am proposing is not so difficult. With $200 million to $300 million, the coffee world could control Starbucks.”
I’m no Warren Buffet, but three fairly obvious problems immediately come to mind:
- As of closing on Friday, Starbucks’ market cap was about $5.76 billion. Wouldn’t more than a few hundred million be necessary to gain a controlling interest?
- Who, exactly, would collaborate with them on this buyout? For example, Brazil and Colombia do not exactly see eye-to-eye on coffee-related matters (or otherwise); they had enough difficulty holding together the Pan American Coffee Bureau. Do they really expect to be able to agree on enough principles to run a US public company cooperatively from Latin America.
- Is it really a good idea to announce that you’re looking into buying a public company before taking action? Is that not likely to raise the price a little?
It seems to me that this little off-the-cuff statement is probably nothing more than speculation, posturing or a publicity stunt; a statement intended to grab some headlines (as it surely will on Monday). Time will tell if he was just floating the idea or if it is the beginning of a slick new plan.
You can read the full Reuters article for yourself: Colombia wants coffee countries to buy Starbucks