Updated 1:37 p.m. ET: Coca-Cola said it is not in talks to buy Monster Beverage Corp., disputing a Wall Street Journal article to the contrary. Monster shares (MNST) surged more than 25 percent after the report on the Journal's website before plunging back to Earth to close the day with a loss.
"At this time, we are not in discussions to acquire the Monster Beverage Corp. Coke said in a statement issued after the market close. "We continue to review the best ways to maximize the value of our relationship."
Shares of Coke (KO) were little changed on the day.
An acquisition of Monster, which has a market capitalization of more than $11 billion, would be the largest brand acquisition for Coca-Cola, according to the paper.
Coca-Cola already has a energy drink brand -- Full Throttle -- but sales have been disappointing. Red Bull and Monster are the market leaders in the market targeted heavily to a younger demographic.
According to the Wall Street Journal report:
... [T]he energy-drinks company is also seen as expensive since its stock price has almost doubled in the last year, people familiar with the matter said. Monster trades at roughly 30 times estimated 2012 earnings, which analysts consider expensive. Its shares hit a new 52-week high last week.
As a result, Coca-Cola may ultimately decide that Monster Beverage's price is too high for a deal, people familiar with the matter said. Coca-Cola already has an agreement with Monster to distribute some of its drinks, and that could diminish the potential synergies from any deal—and thus its willingness to pay a large premium for the company.
A Monster spokeswoman said it is the company's policy not to comment on rumors.
Coke and Monster had held talks last year that did not result in a transaction, according to the Journal, which cited two sources familiar with the situation.
Reuters contributed to this report.