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Keurig Dr Pepper (KDP) has announced that a subsidiary of JAB Holding Company will sell an aggregate of 86,956,522 KDP shares through a secondary offering. JAB also granted an option to the underwriter, Morgan Stanley, to purchase up to an additional 13,043,478 shares within the next 30 days. JAB is selling the block of shares for $29.10 to $29.25 each in a deal that could make the company up to $2.5 billion, according to Bloomberg. The media outlet said that this pricing represents a discount of 2.2% to 2.7% versus KDP’s closing price yesterday (29 February 2024), when shares of the beverage company closed at $29.91 each. CEO of JAB Joachim Creus said: "The proceeds from our sale of KDP shares allow us to maintain our leverage target in line with our financial policies, as we continue to build out our investment portfolio. KDP will continue to be one of our most important investments and we expect to continue to be a long-term anchor shareholder in KDP, at or above the 20% ownership level." Following the completion of the transaction, assuming full exercise of the underwriter's option to purchase additional shares, JAB will own around 21% of KDP's outstanding common stock, bringing KDP's public float to approximately 79%. KDP says that a number of its directors and officers have shown interest in purchasing the shares. Under the terms of the transaction, the remaining shares owned by JAB will be subject to a 180-day lock-up agreement with Morgan Stanley. A lock-up can limit the number of shares that can be sold over a designated period – in this case, 180 days. Lock-up periods typically apply to insiders such as a company's founders, owners, managers and employees, but may also include early investors such as venture capitalists. JAB will use the proceeds to finance its recent investments in pet insurance, according to a person familiar with the situation. The person also said that the KDP share sale is a one-off exercise, and JAB has no immediate plans to sell any further shares in KDP, or other public assets it holds.