Moody's puts JAB on downgrade review

Moody's Investors Service said it placed JAB Holding Co. Sarl's Baa1 long-term issuer rating under review for downgrade, along with the Baa1 senior unsecured notes rating on subsidiary JAB Holdings BV.

The outlook also was revised to under review for downgrade from stable.

The review was prompted by news that JAB's is proposing to tender up to 150 million Coty shares for a stock price of $11.65 per share in cash, Moody's said.

The shares will be purchased by a special purpose vehicle and fully financed with debt with a three-year maturity, the agency explained.

Beyond the proposed transaction, the review for downgrade is also prompted by JAB's aggressive growth strategy in recent years, its complex organizational structure and its concentrated ownership, Moody's said.

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