Keurig Dr Pepper's (KDP) shares rose nearly 3% in afternoon trading after activist investor Starboard Value reportedly built a stake in the soda company at a time when it is set to buy Dutch coffee group JDE Peet's in an $18 billion deal.

According to a Financial Times report, citing people briefed on the matter, Starboard Value had begun building a stake after the announcement of the deal with JDE Peet's in August. The report added that the investor has been having private negotiations with Keurig Dr Pepper's management in recent weeks.

In late August, Keurig Dr Pepper said that after the acquisition closes, it plans to separate into two independent, U.S.-listed, publicly traded companies, creating a beverage company in North America and a global coffee company.

Under the terms of the deal, Keurig Dr Pepper will pay JDE Peet's shareholders €31.85 ($36.87) per share in cash. Upon separation, the coffee company is expected to have about $16 billion in combined annual net sales.

Retail sentiment on Keurig Dr Pepper improved to 'neutral' from 'bearish' territory compared to a day ago, with message volumes at 'normal' levels, according to data from Stocktwits.

The Financial Times noted that the precise size of Starboard's investment in Keurig Dr Pepper remained unclear. The report added that the discussions between the activist firm and the company have primarily centered on enhancing execution and rebuilding investor trust, rather than launching a public campaign.

Shares of Keurig Dr Pepper have declined nearly 18% this year and have lost 28% of their value in the last 12 months.

€1 = $1.16

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